What does the government's cost of living boost mean for family budgets this summer?

Charities have welcomed a government “cost of living boost”, including free bus travel for children in the summer holidays as family budgets continue to face “intense pressure” amid soaring bills.

The government scheme, announced on Wednesday (20 May), includes free bus travel on some routes for children throughout August, as well as targeted cuts to food tariffs to attempt to tackle rising food prices.

The measures mean that children aged five to 15 in England will travel for free on participating local buses throughout August with unlimited journeys.

The prime minister explained that families around the UK are “feeling the squeeze” from the cost of living crisis, and the measures will “make life that bit easier” over the summer holidays.

Charities and experts have welcomed the move, but pointed towards rising child poverty levels, explaining that the measures may not go far enough to protect the most vulnerable.

Alison Garnham, chief executive of Child Poverty Action Group, told the Big Issue that while the summer support package is a good move, family budgets are “down to the bone”, and there is “much more to do to give every child the best start in life”.

Free bus travel will be limited to August. In Scotland, children and young people aged between five and 22 already get free bus travel all year.

“The next step must be sustained investment in families to deal with the cost of living and drive down child poverty,” Garnham said.

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The announcement to cut certain food tariffs on types of products including biscuits, chocolate and dried fruit and nuts has also been welcomed, with the government estimating that this will have a value to consumers of more than £150 million a year.

In addition, the scheme permitting children to travel on buses for free is estimated to save a family with two children who make one weekly return trip around £27 in August. 

“My number one priority is protecting households from rising costs,” chancellor Rachel Reeves said. “This summer I want every family to be able to enjoy themselves, that’s why we’re launching the Great British Summer Savings Scheme, and why we’re helping kids with free bus travel throughout August. 

“As the war in Iran pushes prices up at home, my economic plan is the right one. I will continue to make the right choices, to protect households and businesses, and build a stronger and more secure Britain.”

Despite positive measures, charities explain that the government should also focus on reducing the mounting cost of energy bills in order to support the least wealthy.

“We know millions of people are struggling with the cost of energy, food and housing, which are far higher than before the start of the cost-of-living crisis. Family budgets, already stretched before the crisis, are now under intense pressure,” Peter Matejic, chief analyst at the Joseph Rowntree Foundation, told the Big Issue.

“Low pay, insecure work and inadequate benefit levels mean millions have no financial reserves to fall back on.  In an increasingly uncertain world, having enough set aside to withstand shocks is even more important. Living standards are unlikely to improve for the remainder of this parliament without action across all aspects of government to bring down people’s costs and boost their incomes.”

Matejic added: “It’s right that the hovernment is thinking about ways to help families with the cost of living, including taking steps to reduce the cost of food, transport and attractions, but families need to start to feel more secure. The energy price cap for instance has limited rises in the price of energy, but they need to go further by discounting people’s essential energy use. They can also cap rent increases so they rise slower than earnings and become more affordable.

“These show the scale of the types of changes families need to see to start feeling better off and their living standards improve.”

The summer holidays remain ‘one of the most financially difficult times of the year’

Josephine McCartney, chief executive of The Childhood Trust, explained that for families on low incomes and living below the poverty line, “even relatively small savings can help”, including free bus travel for children during August.

“For many families across London, the summer holidays remain one of the most difficult times of the year financially. When schools close, parents and carers are faced with additional costs for food, childcare and activities, while already struggling to cover the basics,” McCartney added, highlighting that one in three (38%) children in London are growing up in poverty.

“They are already at the point where there is nothing left to reduce,” she said, explaining that the measures may not go far enough to tackle the issue of child poverty this summer.

“A free bus journey is helpful, but many still won’t be able to afford the destination, the lunch, or the childcare needed to get through the summer holidays with dignity and without feeling utterly overwhelmed,” she said. “Children should not spend their summer holidays isolated at home because their families cannot afford the costs that come with six weeks away from school. We need sustained support for children and young people growing up in poverty.”

Harry Quilter-Pinner, executive director at IPPR, added that while Reeves is “right to cut costs for families this summer”, the cost-of-living crisis and child poverty crisis “demands much bolder action”.

“The government needs to wage an all-out war on bills,” Quilter-Pinner said.

“Ministers should show working people whose side the government is on by capping rents, using competition policy to tackle price gouging, and shifting the tax burden from work to wealth. 

“There are plenty of levers the government can pull to lower the cost of living. They must prove they will ‘do whatever it takes’ to help families through this challenging time.”

Helen Barnard, director of policy and research at food bank charity Trussell, explained that the summer support will “do little” for families struggling to pay their bills and afford food, amid the “potentially dire impact of coming price rises”.

“The chancellor stated that energy bills are expected to start rising this summer. We expect this to continue into the winter, and for food and other costs to rise over the year into winter and especially in early 2027,” Barnard added. “The government must urgently prepare a package of targeted measures to protect people on the lowest incomes from being forced into severe hardship as these cost pressures take hold.”

Barnard added that last year, Trussell food banks provided more than 2.6 million emergency food parcels across the UK, proving the need for “firm plans” to protect people on the lowest incomes from “bearing the brunt of further spikes in prices”.

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