Inflation: Rises in energy and food will be causing real fear for families in poverty

19th Jan 2022

Families on low incomes are facing “real fear” as today’s figures show inflation has hit 5.4%, driven in particular by rises in the cost of transport and energy.

Families on low incomes are facing “real fear” as today’s figures show inflation has hit 5.4%, driven in particular by rises in the cost of transport and energy.

Worryingly, the biggest contribution to the rise from 5.1% last month to 5.4% is food, something that makes up a larger proportion of a low-income household's expenditure.

The rising cost of utilities are especially challenging given they take up such a large share of low-income families’ budgets.

Research published yesterday by the Joseph Rowntree Foundation showed that 1.8 million children are growing up in very deep poverty, meaning that for many families a daily struggle for essentials may be all they have ever known.

Given today’s figures indicate the fastest rise in inflation since the early1990s, more families could be pulled into this situation and many will be living in real fear of being unable to afford the essentials.

Rebecca McDonald, Senior Economist at the Joseph Rowntree Foundation, said:

“Many families are already feeling the shock of recent rises in the cost of living, which are causing real fear for those on the lowest incomes.

“The full effects of the massive energy cost increases expected in April when the price cap is lifted, coupled with rises many have seen so far in energy, food and other essentials, will combine to present many with completely impossible choices.

“Living in a cold home or restricting the food you buy for yourself or your children places an enormous strain on families, but we know it is a daily reality already for many. As well as rising foodbank use, we are seeing instances of people needing to seek other sources of help, such as asking neighbours for spare duvets in order to keep warm.

“For those on the lowest incomes, even small increases risk pulling them deeper into poverty, with the support available through the social security system proving inadequate to protect families from harm.

“Urgent and targeted support for people in poverty is essential if families in this country are to bear the shock of this latest rise to their cost of living.”

The Government recently announced that benefits will be uprated by 3.1% in April which will only close part of the growing gap between people’s incomes and their costs. In October, the Office for Budget Responsibility projected inflation to peak at 4.4% by April but today’s 5.4% exceeds that level.