Social Justice

‘People are skint’: Six million workers have no savings as expensive 2022 looms

Millions of households are at risk of financial disaster between low wages and the soaring UK cost of living, Labour has warned

UK cost of living crisis

Labour blamed a series of Conservative government decisions for the crisis facing UK households. Image: HM Treasury/Flickr

Millions of families are without a financial safety net and facing a “miserable January” as the UK cost of living crisis gathers pace, according to Labour analysis.

More than six million adults in working households had no savings at all to fall back on even before the pandemic, the research showed, while over half of working families had less than £3,000 to act as a financial buffer.

People are at risk of being pushed off a cash cliff-edge between the universal credit cut, rising council tax, eye-watering energy bills and the upcoming national insurance increase, Labour said.

“This is a crisis made in Downing Street,” said Jonathan Ashworth, shadow work and pensions secretary.

“Eleven years of the Tories has seen family finances hammered and now it’s shaping up to be a miserable January with heating bills rocketing, prices going up and punishing tax rises on the way.

“The simple truth is people are skint with little if any savings to fall back on,” Ashworth added. “Ordinary working families shouldn’t be forced to pay the price for Boris Johnson’s economic failure.”

Labour’s analysis of Households below Average Income (HBAI) figures, recorded by the government, showed that nearly 27 million people living in working households could be rocked by the financial shockwaves of inflation and government policy.

The data was collected before the pandemic, when economists say households had more cash to spare. Since Covid-19 hit, average disposable income has been hammered and is unlikely to return to pre-pandemic levels for at least two years, the Institute for Fiscal Studies said.

Inflation hit a ten-year high in November and is expected to keep increasing next year. Families could be an average of £1,200 worse-off in 2022, according to Resolution Foundation data published this week, between the sharply rising UK cost of living and stagnant wages which don’t keep up. Household bills are likely to be pushed even higher in April when Ofgem increases the energy price cap.

“We recognise people are facing pressures, which is why we’re taking £4.2bn of decisive action to help,” a government spokesperson said.

“We are providing extensive support to those on the lowest incomes – including putting an average of £1,000 more per year into the pockets of working families on universal credit, increasing the minimum wage and helping with the cost of fuel bills.

“Our £500m Household Support Fund is also giving more help to the most vulnerable, and councils have been given an extra £65m to support low income households with rent arrears.”

Support the Big Issue

For over 30 years, the Big Issue has been committed to ending poverty in the UK. In 2024, our work is needed more than ever. Find out how you can support the Big Issue today.
Vendor martin Hawes

Recommended for you

View all
Archbishop of Canterbury joins growing calls for end to 'cruel' and 'immoral' two-child benefit cap
archbishop of canterbury
Two-child benefit cap

Archbishop of Canterbury joins growing calls for end to 'cruel' and 'immoral' two-child benefit cap

Almost no recorded cases of disability benefit fraud despite DWP crackdown: 'PIP fraud is a non-issue'
dwp pip/ disabled person
Disability benefits

Almost no recorded cases of disability benefit fraud despite DWP crackdown: 'PIP fraud is a non-issue'

Deaf man awarded £50,000 after 'oppressive' and 'discriminatory' treatment by DWP
dwp jobcentre
Department for Work and Pensions

Deaf man awarded £50,000 after 'oppressive' and 'discriminatory' treatment by DWP

The UK used to be the most LGBTQ-friendly place in Europe. Now, it's not even close
LGBTQ+ rights

The UK used to be the most LGBTQ-friendly place in Europe. Now, it's not even close

Most Popular

Read All
Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits
Renters: A mortgage lender's window advertising buy-to-let products
1.

Renters pay their landlords' buy-to-let mortgages, so they should get a share of the profits

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal
Pound coins on a piece of paper with disability living allowancve
2.

Exclusive: Disabled people are 'set up to fail' by the DWP in target-driven disability benefits system, whistleblowers reveal

Cost of living payment 2024: Where to get help now the scheme is over
next dwp cost of living payment 2023
3.

Cost of living payment 2024: Where to get help now the scheme is over

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know
4.

Strike dates 2023: From train drivers to NHS doctors, here are the dates to know