Exceptionally high food inflation is combining with inadequate support from universal credit to create a ‘horrendous new normal’, says JRF

New report also highlights findings specific to low-income universal credit households which show that the situation for them is ‘almost universally dire’

The Joseph Rowntree Foundation (JRF) has highlighted that exceptionally high food inflation is combining with inadequate support from universal credit to create a ‘horrendous new normal’.

In a summary of its Cost of Living Tracker: Summer 2023 – the fourth in a series of large-scale surveys of more than 4,000 households on low incomes (the bottom 40 per cent) issued ahead of publication of the full report tomorrow to coincide with publication of the latest inflation figures – the JRF highlights that –

'… the survey exposes the ongoing effects of CPI inflation which has seen prices rise by over 18 per cent in the last two years. These price rises combined with historically inadequate social security have meant that despite the government stepping in with cost of living payments to support those on low incomes, things are simply not getting better…'

In addition, the report notes the recent, particularly high food inflation figures –

'Record food inflation, which reached 19 per cent at the time of the survey, replaced energy prices as one of the biggest contributors to inflation in April 2023.'

Turning to the survey findings, these include that –

• 5.7 million (48 per cent) low-income households are going hungry or cutting or skipping meals, while the number of households going without other essentials such as showers, transport and toiletries was 6.5 million (56 per cent);
• 2.7 million low-income households (23 per cent) experienced a poor diet, such as eating less nutritious meals, as a result of the cost of living crisis;
• around four in ten (39 per cent) low-income households report being behind on a household bill or a loan, amounting to 4.5 million low-income households with average arrears totaling almost £1,600 – these figures haven’t moved below 4.5 million since October 2021; and
• 2.6 million low-income households (22 per cent) hold a loan with a loan shark, payday lender, doorstep lender or pawn shop.

In addition, findings specific to low-income universal credit households lead the JRF to reach the conclusion that the situation for these households is 'almost universally dire', highlighting that –

• 54 per cent of households have been going without three or more essentials, showing the depth of the situation over a prolonged period in spite of cost of living payments from the government;
• more than two-thirds (69 per cent) of households have changed the type of food they have bought, for example buying less fresh produce; and
• 68 per cent of households have also cut back on food for adults, indicating that the effects of the current cost of living crisis could have consequences for the nation’s health in years to come.

The JRF ends by reiterating its previous calls for the government to implement an Essentials Guarantee to ensure that, at a minimum, the basic rate of universal credit at least covers life's essentials and that support can never be pulled below that level.

Senior Economist for the JRF Rachelle Earwaker said –

'Over the past year people have been telling us about being unable to afford hot meals, shampoo or a warm shower. We are seeing these levels of hardship persist and it has become a horrendous new normal – with over half of low-income households on universal credit going without three or more of the essentials that we all need to live.

That places a huge burden on families in the here and now, but we need to get real that this is a hardship crisis that won’t end as inflation starts to fall. Higher prices will remain baked in, and cost of living payments, while necessary, are not even providing breathing space for people who desperately need it. That is because the universal credit system isn’t based on what people need to live on – even in a good year.

The extraordinary levels of food inflation are also forcing people into buying less fresh and healthy food and more packaged, processed or less nutritious food. We know that poverty is already having a profound impact on the nation’s health and we face the moral outrage of life expectancy falling for some groups. At the same time, hardship on this scale will drive yet more demand onto the NHS over the years to come.

It’s vital for this moment and for the years to come that as a nation we commit to an Essentials Guarantee, to ensure that universal credit supports us all to at least afford essentials, like food, utilities and vital household items, while we recover from setbacks. Without this, many families face the bleak prospect of running to catch up but never being able to because they are in a spiral of debt, rising prices and worsening health.'

For more information, see 5.7 million low-income households having to cut down or skip meals as JRF's cost of living tracker shows 'Horrendous new normal'.

Update (21 June 2023) – the JRF has now published the full report Unable to escape persistent hardship: JRF’s cost of living tracker, Summer 2023.