Millions of Brits have no savings to fall back on in a crisis. Will a new £1bn government scheme help?

When 10-year-old Sabrina’s bed was broken, her mother Sarah did not know what to do. She could not afford to buy a new bed, as a single mother who lives with a debilitating chronic illness which means she is unable to work. She receives benefits, but it is only enough to cover the costs they need to survive like food and bills. When emergency expenses like this crop up, it is difficult to manage.

“It’s made me feel useless and worthless,” Sarah says of her financial situation. “Once upon a time I was a civil servant. I had a good job. I had a house. But since my disabilities have come on, I can’t work and have a child, and it’s like all of a sudden I am not worth anything to society. I used to work and pay taxes, but the minute I’m disabled, I’m not able to work. I’m on benefits. I’m in a council house.”

Millions of people in the UK have no savings to fall back on in a crisis, with debt charity StepChange finding last year that nearly one in four adults are in this situation – around 12.5 million people.

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The government is preparing to launch its new £1 billion crisis and resilience fund in April. This will be paid to local authorities who will then decide how best to distribute it to reach those in need.

It replaces the household support fund, which had been short-term, and represents the first ever multi-year settlement for locally delivered crisis support. The Big Issue understands the government is preparing to publish guidance around how local authorities should use the fund this week.

Sabine Goodwin, the director of the Independent Food Aid Network (IFAN), says: “Running over three years, the crisis and resilience fund has the potential to be transformative for local communities as well as critical to the government’s manifesto commitment on ending mass dependence on emergency food parcels. 

“It’s long been established that delivering local crisis support predominantly through cash payments alongside advice to maximise income makes all the difference while preventing crisis from happening in the first place is fundamental to building financial resilience.”

But is it enough when millions of people are one emergency away from debt? Many have been reliant on charitable support in times of financial crisis.

Sarah received support from Action for Children to help with her daughter’s broken bed. The charity provided her with a new bed and mattress, and she also received support to cover the cost of food last Christmas with a £250 supermarket voucher. She said the help was “amazing”.

“It was literally a lifeline because at that point I did not think I’d be able to afford a new bed. At the moment, the money goes in and the money goes out.There is no money to save up to buy a new bed or mattress. It was an impossibility. And then Action for Children stepped up and said: ‘We’ll do that for you.’ It was such an emotional moment. I cried,” she recalls.

Nearly 4,500 families in financial hardship turned to Action for Children for crisis support between 1 June 2024 and 30 September 2025, and £800,000 of crisis grants were provided during that period.

Lucy Schonegevel, director of influencing for Action for Children, said: “Although the government has taken some major steps forward with the launch of its Child Poverty Strategy [in December], millions of families across the UK are still struggling to afford the basics and the social security system is failing to protect children from severe hardship. 

“Families across the income spectrum are feeling the pain of cost of living increases. This includes families who don’t claim means-tested benefits but are nevertheless experiencing real hardship and presenting to charities and food banks for emergency help.”

A quarter of applications for Action for Children’s crisis help came from working families (25%) and one in seven were not claiming any means-tested benefits (15%).

Almost half of applications were for single parent families (48%) like Sarah. She said she never planned on being a single parent – in fact, she was told that she would never be able to have children. 

“I had a partner. We had a lovely life together. We were going to have children. We had two jobs, full time. We were working it all out. But our relationship broke down when we couldn’t have children. And then my miracle came along and my disability came along not far behind,” Sarah says.

“Things changed rapidly for me in a space of maybe two years. I went from being a person with a house and a job and a partner and we both worked full time to all of a sudden being a single parent with no income, disabled, and then being told I don’t contribute to society.”

Sarah receives personal independence payment (PIP) to help with the extra costs of having the chronic condition fibromyalgia, and she also claims universal credit. But she has no other income as a single mother, and she lives in “fear” of reassessment, where she risks losing her PIP.

“I’m in agony every day and one of the biggest nightmares is the reassessment, because they put you through the ringer,” she says. 

Last year, the government planned to cut PIP but it was forced to U-turn after a rebellion from Labour MPs. Sarah says the experience was “horrifying” and she “could see the rug being pulled out from under me”.

The government is currently in the process of reviewing the PIP assessment, with a conclusion expected to be reached in autumn. It is also working on reforms to support disabled people into work.

“I voted for the Labour Party, and hearing them say all these things about getting people into work and how they don’t work and how they don’t contribute to society…  I used to. It’s not like I want to be disabled.  I would love to be fit and healthy and working, but I can’t. [Fibromyalgia] is not a condition which can be cured,” Sarah says.

There is hope that the government is making steps to support people through financial crises, such as through its crisis and resilience fund, which it promises to not only be about providing cash in emergencies but also building financial resilience so that people are less reliant on charities.

Goodwin says: “We’re hoping that local authority teams will be able to ensure their residents can easily identify immediate cash-first crisis support combined with help to access any existing entitlements and can also find the help that’s needed when money worries start. By putting cash-first or income-focused crisis responses at the heart of strong networks of community support, far fewer people will have to turn to a food bank or any other form of charitable food provision to be able to eat and far more people will be able to build financial resilience.”

The government has been contacted for comment.

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