Break the cycle of poverty for good
Big Futures is calling on the Government to put in place a plan and policies to break this cycle of poverty for good. We are calling for long-term solutions to meet the biggest issues faced in the UK today – the housing crisis, low wages and the climate crisis. Dealing with these issues will help the UK to protect the environmental, social, economic and cultural wellbeing of future generations. So that young people and future generations have a fair shot at life. Join us and demand a better future.
Russia’s invasion of Ukraine has already had a significant impact on global oil and gas prices, with UK gas costs now almost triple what they were at the start of February. Those costs will be passed onto consumers in the months to come.
The report paints a bleak picture of UK family finances for years to come. Without a significant increase in average wages, typical household incomes are set to be lower in 2025-26 than in 2021-22, the analysts said. This means the pandemic “may actually have been as good as it gets” in terms of incomes across the country, for at least the first half of the 2020s.
The findings are “extremely worrying”, said Labour’s shadow chancellor Rachel Reeves, and make it “more urgent than ever that the chancellor cancels his planned national insurance hike”.
Ministers will increase national insurance payments by 1.25 per cent starting next month, dubbed a health and social care levy by Boris Johnson.
“The government has allowed the cost of living crisis to spiral out of control since September, refusing to take action – and in fact proposing now to make it worse with an unfair tax hike.”
The report notes the social security system is supposed to protect families who could struggle to afford daily essentials, but that next month benefits will increase by just 3.1 per cent – less than half of inflation which “could be well over eight per cent”.
This will mean a real-terms benefits cut of more than £10bn, the think tank said, more than the government spent on the £20-per-week universal credit increase – which was cut last October – across 2020 and 2021. Responding to the findings, Richard Walker – managing director for Iceland supermarkets – warned food prices could soar above even the eight per cent inflation figure predicted.
It means the proportion of children living in the deepest poverty will be higher in 2026-27 than at the start of the decade, which analysts said is something “never seen before in modern Britain”.
The household income crisis will result in a “living standards rollercoaster” for millions of families, Corlett said.
“The immediate priority should be for the chancellor to revisit benefits uprating in his upcoming Spring Statement.
“In the longer term, turning around the UK’s relative decline compared to other advanced economies, and reversing our terrible recent record on productivity, is the only route to meeting the living standards challenges Britain faces.”
A government spokesperson said: “We recognise the pressures people are facing with the cost of living, which is why we’re providing support worth around £20bn this financial year and next to help.”