York-based Joseph Rowntree Foundation warns that millions of households face hardship amid the cost of living crisis

Millions of children face being plunged deeper into poverty amid the cost of living crisis with the soaring price of energy will see some households spending more than half of their incomes on bills.

New analysis published today by the York-based Joseph Rowntree Foundation (JRF) has revealed as many as 1.8 million children are growing up in the most extreme levels of poverty, meaning the household’s income is so low that it is completely inadequate to cover the basics.

The figure represents an increase of half-a-million children between 2011-12 and 2019-20.

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The cost of living crisis which has engulfed the UK has accentuated the challenges faced by households on low incomes, with the impact of rising energy bills particularly pronounced.

The York-based Joseph Rowntree Foundation's deputy director of policy and partnerships, Katie Schmuecker, has warned that more needs to be done to help tackle the cost of living crisis, especially for households on the lowest incomes. (Photo: Joseph Rowntree Foundation)The York-based Joseph Rowntree Foundation's deputy director of policy and partnerships, Katie Schmuecker, has warned that more needs to be done to help tackle the cost of living crisis, especially for households on the lowest incomes. (Photo: Joseph Rowntree Foundation)
The York-based Joseph Rowntree Foundation's deputy director of policy and partnerships, Katie Schmuecker, has warned that more needs to be done to help tackle the cost of living crisis, especially for households on the lowest incomes. (Photo: Joseph Rowntree Foundation)

The study by the JRF has shown that households on low incomes will be spending about 18 per cent of their income after housing costs are taken into account on energy bills after April, when the energy price cap is expected to rise dramatically.

For single adult households on low incomes, the figure rises to 54 per cent, an increase of 21 percentage points since 2019/20.

The deputy director of policy and partnerships at the foundation, Katie Schmuecker, said: “No childhood should be defined by a daily struggle to afford the basics. But the reality is that many children growing up today won’t have known anything else.

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“The fact that more children are in poverty and sinking deeper into poverty should shame us all.

“Rising energy prices will affect us all, but our analysis shows they have the potential to devastate the budgets of families on the lowest incomes.

“The Government cannot stand by and allow the rising cost of living to knock people off their feet.

“The alarm is sounding loud and clear and the case for targeted support to help people on the lowest incomes could not be clearer.

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“But this must go hand in hand with urgent action to strengthen our social security system, which was woefully inadequate even before living costs began to rise. Our basic rate of benefits is at its lowest real rate for 30 years and this is causing avoidable hardship.

“The Government must do the right thing and strengthen this vital public service.”

The findings, which is part of the foundation’s State of the Nation report, also highlight large numbers of children living on low incomes for prolonged periods of time in the years running up to the coronavirus pandemic.

About one in five children have lived on a low income for at least three of the four years between 2016 and 2019. For children in lone parent families, the figure rises to about one in three children.

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The JRF’s report has found that people in poverty are also less likely to have savings that can act as a buffer when costs go up.

Just over a third of people in poverty have liquid savings of less than £250 compared with one in six of the overall population.

Recent research from the JRF found that about 3.8m households are in an estimated £5.2bn of arrears with household bills, a number that has tripled since the pandemic hit.

The JRF has called for a far more targeted approach to tackle poverty in the face of soaring energy bills.

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The foundation has said there is a “clear case” for targeted protections to prevent serious hardship once the energy price cap is revised from April, warning the impact of rising bills will hit families on low incomes the hardest.

Following the Government’s cut to Universal Credit in the autumn, the foundation said the level of support for people who are unable to work or are looking for a job remains “profoundly inadequate”, and called for an immediate emergency payment for people on the lowest incomes.

Poverty rates in the Yorkshire and the Humber region have fallen since the end of the 20th century, although they have increased in recent years.

According to the JRF, 27 per cent of people were living in poverty between 1997 and 2000, and the figure had fallen to 23 per cent by 2007 to 2010.

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However, there had been a rise to 24 per cent between 2017 and 2020, but this still represented a three per cent fall since the final three years of the 20th century.

The Government stressed that it is providing £4.2bn in financial support for low income and vulnerable households.

A spokesperson said: “We recognise the pressures people are facing on their household bills, which is why we have taken decisive steps to support them.

“The Energy Price Cap has been protecting around 15 million households from high global gas prices.

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“We are also supporting vulnerable and low-income households with the cost of fuel bills through schemes such as the Warm Home Discount and our £500m Household Support Fund.

“Working families on Universal Credit are already seeing more money in their pockets, with an average of £1,000 more a year, and we’re increasing the living wage again in April.

“We will continue to look closely at the pressures facing people and what further measures might be needed on abating high energy costs.”

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