Low income families will be more than £1,000-a-year worse off due to budget pressures, says report

FAMILIES face a “triple whammy” hit to their pockets which will leave them £1,000 worse off over the coming year, a study says.

Households with children could see their income plunge £20 a week resulting from rising living costs, energy price hikes and a fall in income support, research shows.

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The hardest hit in the ‘living squeeze’ will be low and middle income families, the Resolution Foundation says.

Living pressures hitting the country will see inflation hitting 4 per cent over the winter, some utility bills up 12 per cent next month, and the end of the £20 uplift to Universal Credit.

Even wage growth will likely turn negative for many workers as inflation rockets, it says.

A couple with two children, both working full-time and earning slightly above the new NLW, would be £23 a week worse off.

The government must change course or face owning the ‘living squeeze’, the Resolution Foundation says.

Meanwhile, research by Turn2us estimates that half of people on Universal Credit will struggle to pay their bills once the uplift is scrapped at the end of this month. The national poverty charity estimates it could affect 3 million people.

Anna Stevenson, welfare benefit specialist at Turn2us, added: “Ultimately, this will push many people who are struggling to cover basic needs like food, rent and utility bills, over a financial cliff edge.”

Cost of living squeeze

Karl Handscomb, senior economist at the Resolution Foundation, said: “Britain is about to enter a tight cost of living squeeze over the next six months as high inflation and rising energy bills collide with the Government’s decision to cut benefits and raise taxes.”

Turn2us warns that 1.5 million will be unable to afford rent or mortgage payments once the £20 Universal Credit uplift is removed. Up to 900,000 on the benefit could be at risk of losing their home.

Handscomb added: “Low-and-middle-income families will face the tightest squeeze. Many drivers of high inflation should be short-lived, but that will be of little comfort to families struggling over the coming weeks and months.

“While policies like the National Living Wage will deliver a welcome income boost for some, for many low-income families this won’t come close to offsetting the damage caused by cutting Universal Credit.

“Maintaining the £20 a week uplift will go a long towards easing the coming cost of living squeeze for millions of families.”

We have looked at how families can try to protect themselves from the cost of living crisis. From home to get the best deal on your savings and mortgages to energy and household bills.

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This post first appeared on thesun.co.uk