Why more parents feel ‘intensely worried’ about money and debt

The three factors locking families into daily struggles to make ends meet.

The second Sainsbury's Living Well index was published this week. It finds that one in four parents feel ‘intensely worried’ about money or debt. So why are parents so financially stressed?

Firstly, rising living costs are sweeping families into situations where they have to make impossible choices – which bills they can afford each month, which essentials to cut back on, what to give up when an unexpected expense comes along. Living costs have been rising especially sharply for low-income families because they spend proportionally more of their money on essentials like food and energy, which have risen more than the headline rate of inflation.

Based on this week’s inflation figures, over the past year energy bills increased by 5.7%, leaving a typical household in the bottom fifth paying £55 more compared to last year for the same energy use. Food prices rose more slowly but the same weekly shop costs an additional £35. Low-income families often rely on buses to get to work, school and elsewhere. Bus fares rose by nearly 4.7%, meaning that low-income households that regularly use buses pay an extra £40 per year.

Secondly, at the same time, nearly half of working-age adults in the poorest fifth of the population spend more than a third of their income on housing. The lack of low-cost social rented housing is pushing families with children into the private rented sector where they face high costs for poorer quality housing, which is often also insecure. This traps many on a housing treadmill with little prospect of escape.

Thirdly, low-paid insecure work is also trapping more working families in poverty. Employment is at a record high, which is good news. But two thirds of working age adults and children in poverty now live in working households. Families with children are the group most likely to be locked in poverty despite being in work, and in recent years their risk of in-work poverty has increased.

Families with low earnings rely on tax credits and Universal Credit to top up their incomes amid low pay and rising costs. But this is not providing the anchor people need to keep them from being swept into poverty. Benefits and tax credits are frozen, not keeping up with the rising cost of essentials. Cuts to Universal Credit mean that many parents on low pay get to keep less of their earnings, making it much harder for them to escape the grip of poverty and build a better life.

We know that it isn’t right for so many parents and children to be locked into poverty. Parents we’ve spoken to highlight the constant anxiety and stress they feel when the money just won’t stretch far enough:

It just makes you feel sick and you don’t know from one day to the next
Low-income parent

I tried to phone for a doctor’s appointment and I couldn’t even ask for one, I just broke down...I’m now six weeks on, on anti-depressants because it is that bad, yes. Will I lose my flat? Will I lose what I’ve got, you know? You are not guaranteed that I am still going to have my flat and I’m still going to have everything and that I can provide for my daughter.
Low-income parent
It’s the grind that gets you down, every single day … I think what contributes to me being ill was having so many years of having to cope, basically.
Low-income parent

We all need to take action to loosen the hold that poverty has on families. Employers and businesses must do more to help low-paid staff progress and increase their earnings. The Government should reform Universal Credit so that it helps people out of poverty by letting low-income working families keep more of their earnings. And we need a step change in the number of affordable homes being built – at least 30,000 more every year in England.