Families with children see cost of living rise by £400 a month as benefits fall to 40-year low Business News

Families are seeing the prices of basic goods such as heating, rent and food rise by £400 a month, according to new analysis showing the severity of Britain’s cost of living crisis.

It revealed that low-income families with two children were among the hardest hit, seeing the cost of living rise at an annual rate of 13% – well above the official rate of 9%.

This is largely because they are spending more on fuel and food, which have seen some of the steepest price increases. Families with the lowest incomes are hit harder and earlier than others, said the Joseph Rowntree Foundation (JRF).

It comes as soaring inflation has pushed the value of benefit payments to their lowest level since 1982. With inflation expected to peak at 10.25% later this year, benefits will not rose only 3.1% after the government refused to introduce an increase in Universal Credit payments.

This comes on top of the scrapping of a £20-a-week increase in Universal Credit introduced during the pandemic, and follows a decade of cuts in real terms to benefit payments.

The JRF calculated what families would need to meet the ‘minimum income standard’, a measure developed by academics at Loughborough University.

It is based on elements that the general public considers necessary to achieve an acceptable standard of living. On this basis, the cost of staple foods increased by 9.3%, significantly more than the official figure of 6.7%. Childcare is also up 6.7%, according to the analysis.

In cash terms, families are spending around £120 extra a month on energy, £90 on transport including petrol and £65 on childcare, the JRF estimates.

Faith Angwet is among those affected. She has two children aged five and two. She is taking part in Covid Realities, a University of York study to document low-income living in the UK.

Ms Angwet said it was becoming increasingly difficult to budget after cutting in many areas and being hit by further price hikes.

“If you’ve already cut the fabric to the point where there are no threads left, what are you supposed to do?” she said.

Ms. Angwet juggles childcare responsibilities with studying to become a teaching assistant. She receives universal credit but says it is difficult to cover basic expenses like rent and heating.

“Most of our money goes on bills, and then the last two weeks of every month are really tough,” she said.

“I use different schemes to get out of it. Sometimes kids go to after school clubs where they get fruit or something.

Ms Angwet now visits food banks to make sure her children have enough to eat. “It’s very stressful,” she said.

Tayyaba Siddiqui, a key NHS worker who is also a single mother and a survivor of domestic abuse, said most of her salary was paid on the day she was paid. “I think: how is this going to last 30 days?”

“I work and I cannot afford to buy basic necessities for me and my 11-year-old son. He needs shoes for school and I need shoes for work. I can’t afford both, which is more important? »

She said her mental health suffered and she felt she had no family in the UK to turn to.

“I think I’m a strong woman but now for the first time I can’t cope.

“I can’t sleep at night. My salary has not increased, only the cost of living has increased. It used to be that basic purchases cost me £20, now it’s suddenly £35 or £40. It’s for milk, bread, the basics, not luxuries.

“Kids can tell when their parents are worried,” she said. “Single parents are in trouble, I am not the only one. There must be support adapted to the different situations of people.

Matt Padley, senior researcher at Loughborough University, said the latest figures showed a “dramatic increase in what households with children need to meet their basic needs and participate in our society”.

He added: “The rise in the cost of home energy is particularly striking and this is expected to increase further later in the year. As a result of these increases, many households will have to cut spending, making tough choices about what to go without and which of their needs to prioritize.

“Households in the UK in 2022 shouldn’t have to make these kinds of decisions.”