News

Families feel the pinch

10 January 2022

Rising inflation and the reduction in government financial support following the pandemic are hitting families hard. Journalist Anna Scott looks at the impact and how CPs can offer support.

October 2021 marked the end of the government’s Coronavirus Job Retention Scheme, better known as furlough, and the end of the £20-a-week Universal Credit uplift. In the same month, grocery inflation rose to 2.1% – the fastest rise in food prices since August 2020, due in part to rising supply chain costs (McKevitt, 2021).

UK petrol prices reached a record level of 142.94p per litre as global oil prices rose (RAC, 2021). The energy price cap set by government regulator Ofgem was increased in response to a rise of more than 50% in energy costs in 2021, with gas prices hitting a record high as the world came out of lockdown (Ofgem, 2021).

So what impact is this all having on families in the UK? In his Budget in October 2021, chancellor Rishi Sunak acknowledged the squeeze on families as a result of increasing inflation caused in part by the pandemic. He announced plans to cut the Universal Credit Taper – a reduction to the benefit based on earned income – from 63% to 55%, meaning working claimants would lose 55p of every £1 of Universal Credit rather than 63p. He also cancelled the planned rise in fuel duty, introduced a ‘Start for Life’ offer for families, and tailored services to help with perinatal mental health (HM Treasury, 2021).

Debt balloon

Despite these and other government measures (see panel on page 16), families are still facing a variety of financial pressures. Rising rent costs are a big problem. ‘With over £25bn in total arrears and borrowing built up since May 2020, without proper support as costs rise for basic essentials, heating and travel, the UK potentially faces a future where those on lower incomes are shackled by historic pandemic debts they have little chance of lifting,’ Sue Anderson, head of media at the debt charity StepChange, says.

‘Among lower-income households experiencing problem debt, the combination of higher inflation, reduced income and the ongoing backlog of debt, especially rent debt, means times are tough for some people, especially if they have additional vulnerabilities,’ she adds.

The proportion of people with gas bill arrears increased from 22% to 24% between August and September 2021 and the proportion of people behind on electricity bills is higher (27%) than the previous year (26%) (StepChange, 2021). ‘Those who were already struggling to cope are bearing the brunt of the perfect storm of circumstances emerging as we head into the winter,’ Sue adds.

Choosing between food and fuel

For the most vulnerable families, these circumstances represent ‘problems on top of problems’, says Dave Munday, lead professional officer (mental health) at Unite. ‘The poorest in society have had a really torrid few years anyway. Many will have gone into the pandemic without any kind of financial backup. And as people think about Christmas it acts as a reminder of their financial situation.’

He points to the fact that many of the most vulnerable workers in society don’t work in that part of the economy supported by the furlough scheme –those on zero hours contracts for example. ‘People who work in certain sectors or people without really strong employment contracts have really suffered. Those at the bottom don’t have any wiggle room,’ Dave adds.

Janet Taylor, chair of the CPHVA Executive, says people are often forced to make a choice: do I eat, or put money in the gas or electricity meter? ‘If you have a baby in the house, you can’t afford for your electricity to go off,’ she says. ‘You need to be able to wash clothes, you need to be able to heat the place.’ She adds that people are living in the short term at the moment. ‘They think, “If I can just get through this week, then I’ll try and get through next week.”’

‘It’s very hard if you’ve got a life where there are so many things you can’t do,’ Janet adds. ‘People might want to be able to indulge to a degree for Christmas and they might borrow money. Then January comes around and they’ve just got the debt.’

Mental wellbeing

The mental health repercussions of poor financial wellbeing is the biggest concern for the Health Foundation. ‘There was a big rise in reported poor mental health, particularly in the early part of the pandemic,’ says David Finch, assistant director of the charity’s Healthy Lives directorate.

‘It has tended to be worse for people experiencing financial strain. What is clearly happening is a growing understanding that we have had this cut to Universal Credit and prices are rising. We are concerned about the actual and perceived financial strain that people might be experiencing and how that feeds through to poorer mental health,’ he adds.

‘Mental wellbeing is a huge issue when people cannot afford toiletries and food. The reality from my time in practice, and from listening to people who are expert in this, is that the vast majority of people don’t want charity,’ Dave says. ‘You hear stories of people going to foodbanks in high distress because in their mind it’s an acceptance of their failure in life.’

Yet more people are going to foodbanks. In the last five years, demand has risen by 128% and a record 2.5 million emergency food parcels were distributed in the year to April 2021, a 33% increase on the previous year (Trussell Trust, 2021). ‘Anecdotally, our members are saying that more families are using foodbanks and have been doing so for a long time,’ Jane says.


Government measures to help the most vulnerable

Northern Ireland: The Executive has approved plans to extend for three years welfare mitigations schemes that alleviate the impact of changes to the social security system imposed by Westminster, such as the benefit cap and two-child limit. Department for Communities, 2021

Wales: The government announced in August 2021 £11.5m of funding to boost the Child Development Fund, which provides support to children and families to address developmental delays, and to the Children and Communities Grant to drive down waiting lists for early help and support services. Welsh Government, 2021

Scotland: Funded with £41m from the Household Support Fund, the Winter Support Fund, announced in October 2021, will help people struggling to pay fuel bills, support low-income families and provide flexible funding to help local authorities support wellbeing and respond to financial insecurity based on local needs. Scottish Government, 2021

England: A £500m Household Support Fund was made available in October 2021 to help the most vulnerable households with essentials during the pandemic recovery period. Councils in England will distribute funds to their local areas, through small grants for items such as food, clothing and utilities. The devolved administrations will receive up to £79m of the £500m. Department for Work and Pensions, 2021


How you can offer support

It’s not just the most vulnerable who are struggling. ‘There are NHS staff who have to go to foodbanks,’ Janet says. ‘We feel we have decent jobs, and we do if you look at the salary, but I am also having calls from members who have got into debt and just cannot manage.’

Even those with higher incomes will have a squeeze on their finances. ‘The real big picture here is that we are in for a number of years of very weak growth in our overall living standards, and a strain on families’ finances,’ David says. ‘But it’s about trying to make sure there’s support in place for those affected the most.’

He says community practitioners (CPs) provide on-the-ground intelligence to link people to local services they need. ‘The main challenge [with emergency state funding] is being able to access it, and ensuring families are aware of that support and can get hold of it. For example, the Universal Credit system has been known to exacerbate poor mental health because the system itself is difficult to use.’

Helping clients and families with money worries is part of a CP’s job, given the impact on mental health. Dave says. ‘School nurses have a particular role. Hopefully, they are in a situation where they have a relationship with schools, and schools can obviously act as an early warning system to highlight families that are suffering significantly.’

When families are struggling, it’s very hard to ‘prioritise other advice when someone is sitting there thinking they don’t know when they can turn the heating on’, Janet adds. ‘Health visitors are trying to go into someone’s home to talk about healthy living, healthy eating. Your priorities shift.’ In some cases, she says, CPs are signposting clients to help, and in some cases they are helping them with applications for support. They’re also linking up with other professionals, such as community psychiatric mental health nurses. ‘Often we will work in partnership in order to try and support a family,’ Janet adds. 

CPs can also ‘normalise the need to ask for help’, Dave adds. ‘We need to be saying to families that just because the system isn’t working for them, it doesn’t mean they are the failure they might think they are. If they need food, go to a foodbank – don’t feel that there might be other people more in need.’

As we all feel the squeeze this winter, it’s clear CPs will play a vital role in supporting the most vulnerable in society.


Resources

Citizens Advice – Help with debt bit.ly/Citizens_Advice_debt_help

Salvation Army – Emergency assistance bit.ly/Salvation_Army_debt_advice

StepChange – Help with debt bit.ly/StepChange_debt_help

Trussell Trust – How to get a food voucher bit.ly/Trussell_Trust_food_vouchers


References

Citizens Advice. (2021) Rising pressure on household budgets. See: citizensadvice.org.uk/Global/CitizensAdvice/Debt%20and%20Money%20Publications/(tps)%20Rising%20pressure%20on%20household%20budgets%20-%20October%202021%20%20(1).pdf (accessed 23 November 2021).

Department for Communities. (2021) Communities Minister Hargey announces welfare protections extension. See: communities-ni.gov.uk/news/communities-minister-hargey-announces-welfare-protections-extension (accessed 23 November 2021).

Department for Work and Pensions. (2021) Government launches £500m support for vulnerable households over winter. See: gov.uk/government/news/government-launches-500m-support-for-vulnerable-households-over-winter (accessed 23 November 2021).

HM Treasury. (2021) Autumn budget and spending review 2021 speech. See: gov.uk/government/speeches/autumn-budget-and-spending-review-2021-speech (accessed 23 November 2021).

McKevitt F. (2021) New baseline for UK grocery market as shopper habits stabilise. Kantar. See: kantar.com/inspiration/fmcg/2021-wp-new-baseline-for-uk-grocery-market-as-shopper-habits-stabilise (accessed 23 November 2021).

Office for National Statistics. (2021) Consumer price inflation, UK: October 2021. See: https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/consumerpriceinflation/october2021 (accessed 23 November 2021).

Ofgem. (2021) Record gas prices drive up price cap by £139 – customers encouraged to contact supplier for support and switch to better deal if possible. See: ofgem.gov.uk/publications/record-gas-prices-drive-price-cap-ps139-customers-encouraged-contact-supplier-support-and-switch-better-deal-if-possible (accessed 23 November 2021).

RAC. (2021) Petrol hits new record high of 142.94p after more than nine and a half years. See: rac.co.uk/drive/news/fuel-prices/petrol-hits-new-record-high-of-142.94p-after-more-than-nine-and-a-half-year/ (accessed 18 November 2021).

Scottish Government. (2021) Financial help for families in need. See: gov.scot/news/financial-help-for-families-in-need-1 (accessed 23 November 2021).

Step Change. (2021) Debt advice during coronavirus. See: stepchange.org/policy-and-research/personal-debt-statistics-in-the-uk/coronavirus-september-2021.aspx (accessed 23 November 2021).

Trussell Trust. (2021) End of year stats. See: trusselltrust.org/news-and-blog/latest-stats/end-year-stats/ (accessed 23 November 2021).

Welsh Government. (2021) Written statement: support for families and vulnerable people. See: gov.wales/written-statement-support-families-and-vulnerable-people (accessed 18 November 2021).

Image credit | Ikon | Shutterstock

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