The worst is yet to come for families struggling with the cost of living, warns a group of experts

The worst is yet to come for families struggling with the cost of living, warns a group of experts

The worst is yet to come for families struggling with the cost of living, warns a group of experts

The biggest impact of the drastic drop in living standards remains to be seen, according to new research showing that families across the UK have only experienced half the loss of income they are expected to suffer during the cost crisis. of life.

A new analysis from the Resolution Foundation think tank suggests the average household across the country will be left £2,100 worse off by the end of the next fiscal year.

After housing costs, typical working-age family income is projected to fall 3% in the year to the end of March, followed by a 4% drop over the next 12 months.

The 7% drop will hit families harder than during the financial crisis of more than a decade ago.

The post-crisis contraction only reached around 5% between the financial years of 2010 and 2012.

It would leave households worse off than before the pandemic until 2028, the think tank said.

Although the crisis is not yet halfway over, the report’s authors said millions are already struggling to match the massive increase in costs they’ve seen this year.

They say that nearly a quarter (23%) of the adult respondents to the survey, equivalent to 12 million people nationwide, said they could not afford to replace or repair their refrigerators, washing machines or other large electrical appliances.

Before the pandemic, only 8% said the same.

The researchers also found that 11% say that at some point in the past month they went hungry because they didn’t have enough money.

Before the pandemic, 5% said they were hungry due to lack of money.

Among the poorest fifth of families, more than a third (34%) say their health has been affected by the rising cost of living.

“Britain is only at the halfway point of a two-year income cut, which will leave typical families £2,100 worse off,” said Lalitha Try, a researcher at the Resolution Foundation.

“The crisis is already taking its toll on families, with more than six million adults reporting going hungry as a result.

“Low-income families have been hardest hit by rising energy bills and food prices, and are more likely to have seen both their financial situation and health deteriorate.

“The government has correctly prioritized them in its response to the crisis, with targeted support for vulnerable households and tax increases affecting wealthier families.”

Peter Marland, Chairman of the Local Government Association Resources Board, said: “Councils are urging the government to make the household support fund it has provided to councils permanent, along with more flexibility. so that they can ensure that it helps the people most in need.

“This would also enable councils to crucially shift their focus from short-term crisis support to investing in preventative services that build financial capacity and resilience, such as entitlement checks; debt counselling; and support for employment, health and housing”.

Labor Party shadow chancellor Rachel Reeves said: “Hearing that we are only halfway through this cost of living crisis from the Conservatives will alarm many families and bring home again the profound damage this government has done to over the years.

“Britain deserves so much more than 13 years of Tory rule that has left growth at rock bottom, wages slashed, living standards plummeting and our public services collapsing.”

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