While the cost of living crisis is continuing to hit everyone, low-income households are paying £430 per year more on average due to the poverty premium.
People on low incomes pay more for essential products and services, including forking out extra for home and car insurance due to where they live or being forced to use high interest credit cards and loans and prepayment meters for energy.
One in eight households in Britain experience at least one type of poverty premium, costing each British constituency £4.5 million each year on average, according to the new research from Fair By Design and the University of Bristol.
“People shouldn’t have to pay more for life’s essentials because they are on a low income. Industry, government and regulators need to come together to make sure everyone can access the products and services they need at a price that is fair,” said Martin Coppack, Fair By Design director.
“As families across Britain struggle with the cost of living crisis, taking action to end the poverty premium has never been more urgent. Government intervention to eliminate the poverty premium would put on average £430 back into the pockets of over 3.5 million low-income households without requiring any additional funding from the Treasury.”
For the first time, the campaigners have produced an interactive tool to allow people to see the economic impact of the poverty premium in their local area.