The second £300 Cost-of-Living Payment lands in people’s bank accounts over the next few weeks. Yet this money from the UK Government to help those on the lowest incomes withstand the shocks of soaring prices is sadly no longer the boost ministers believed it could be. From speaking to families across the country, it’s clear this is now nothing more than a "survival payment". Rent arrears, servicing debts, school meal bills, transport to get to work, overdue energy bills...this money will only reset families to a miserable status quo.
Mum Tasha, from Wiltshire, said: "Mine will go towards my overdue last few bills." While Kaysey, who has a teeanage daughter, explained: “Mine will need to go on my car because I need two new tyres so I can get to work. I had to borrow [money] off family, so I will need to pay them back.”
The cost-of-living crisis continues to impact families on low incomes who are struggling to afford their essential household expenses. As Rebecca, a mother of one from Norfolk, said: “Money no longer has any meaning. The cost of food is so high that I can’t budget for me and my daughter anymore, despite juggling several jobs.”
The upcoming Autumn Statement is therefore one of the handful of chances the Chancellor has left before the general election to focus on those suffering the most. We propose THREE practical, doable actions for Government that would go a long way to support families on low incomes.
The Chancellor must:
Raise benefits in line with inflation.
Employment and social security support from the government is supposed to meet essential costs. Currently this is not happening. The Chancellor must uprate social security payments in line with September’s inflation figures (6.7%). Anything less than this amounts to a cut in support for the lowest incomes families.
It’s easy to dismiss one or two percentages as negligible to people’s pockets but when you’re counting every penny a shortfall of between £127 - £260 over the course of 2024-25 equates to several months of school meals.
Reform Local Housing Allowance (LHA).
Local Housing Allowance rates are used to calculate the amount of housing benefit people receive who rent from a private landlord. It is based on rents in the local private rental market depending on where you live in the country. Currently low-income families with children are struggling to meet their monthly housing costs because their LHA rates do not adequately match private rents. We are calling for LHA to be reformed to cover at least the cheapest 30% of local rents and in future make sure they meet the actual costs of renting.
Further reform childcare.
The UK government’s childcare announcements in the spring were clearly welcome, but there are still many problems with the system. These issues continue to prevent parents from returning to work and ensuring the best possible outcomes for children.
One change we need is to extend the 30 hours free childcare offer to parents in training and education to support parents who want to upskill themselves and improve their employability.
The second is increasing the overall funding they are paying to providers to deliver the free hours offer, particularly for the 3–4 year old offer. The childcare sector has said the current funding offer does not cover the true costs for providers and will hamper their ability to deliver the Government’s expanded offer.
And there are more ways to help...
More ways the Chancellor could tackle the cost-of-living crisis beyond the £300 “survival payments” could be scrapping the punitive two-child limit to benefits and lifting the benefit cap. Rolling out free school meals to all families on Universal Credit, not just those who earn under £7400, would help 800,000 children living in poverty. A Universal Childcare Guarantee for babies through to children age 11 would also boost family incomes.
Any of these measures would give children a much better start in life. The Chancellor should use the Autumn Statement to send a bold signal to the country he is serious about supporting families and the next generation.
