Three million families facing crisis as cost of living crunch bites

• One in five have already cut back on food shop or turned off heating to save money

• Citizens Advice calls for urgent action to prevent wave of hardship this winter

New research on the cost of living crunch by Citizens Advice reveals one in ten families - equivalent to 3.2 million households - are facing financial crisis this winter.

The charity analysed average income data against household spend on essentials like rent, bills and food to establish how many families can meet their living costs.

It found that even if living on a minimal budget - the financial plan its advisers use to support people through a debt management process - more than three million households would be in the red or unable to cover the essentials. 

A further 380,000 households have less than £50 spare each month after covering their basic living costs, putting them at risk of hardship if they faced an unexpected bill.

Separate polling of 2,000 UK adults by Citizens Advice shows:

• More than a third of people (37%) are worried about paying their bills this winter. This rises to nearly half (48%) of people on low incomes.

• One in five people have already cut back on their food shop (19%) or used less heating (20%) in the last three months to save money.

• One in ten (10%) people anticipate accessing crisis support this winter, like food banks or fuel vouchers.

‘Dire’ consequences of cost of living crisis beginning to show 

Citizens Advice says it is anticipating rising numbers of people in hardship seeking its support this winter. It warns low-income families have been hit by a triple whammy of the £20-a-week Universal Credit cut, soaring energy bills and rising inflation.

This trend has already started to show. In the last three months, nearly three quarters (73%) of frontline staff at Citizens Advice reported an increase in the number of people coming to them unable to afford essential household costs such as food, rent and heating.  

“I’m living in one room to keep the heat down as low as I possibly can”

Gordon*, in his 60s, from Devon, had to give up his job as an engineer when he was diagnosed with spinal cancer in 2019. 

Due to his health his previous housing wasn’t suitable, so Citizens Advice supported him to move into a bungalow. Gordon* has been claiming Universal Credit as he can’t work, but recently saw this drop by £20 a week. He’s struggling with bills and can’t afford healthy food.

Gordon* says: “I don't buy the things I need to buy. I’m constantly looking at the bank account. It’s the epitome of being tight but I’ve got to be very careful. I put things off as I can't afford the petrol to drive. I feel isolated and stressed, but what can I do?

“I’m living in one room to keep the heat down as low as I possibly can, but everything is just mounting up. It’s direct debit after direct debit and any minute I think I’m going to be in the minus.”

Aasia Majid, an adviser at Citizens Advice Manchester, says:

"We're hearing every day from people who've never had a food bank voucher but now can't afford the weekly shop. Their income is the same or less but their costs have shot up.

"It's a choice of which bill to fall behind on each month; a choice between the risk of eviction or being cut off. I spoke to one man who said things are so bad he’s keeping warm at night by wearing three jumpers and lying on the sofa with his dog. 

“It's absolutely heartbreaking, but we're expecting we’ll see more and more calls like that this winter."

Earlier this autumn the Chancellor announced a Household Support Fund worth £500 million to help tackle the cost of living crisis. While Citizens Advice welcomes this measure, it warns substantial investment in the benefits system is needed to prevent millions falling into further hardship over the coming months.

As a first step, the charity is calling for the government to bring forward its uprating of benefits by the level of inflation to this December. This would mean the average family on Universal Credit could see their income rise by around £30 a month. 

Dame Clare Moriarty, Chief Executive of Citizens Advice, said:

“All of us are noticing our bills go up, but for people on the tightest budgets there’s simply nothing left to cut back on. 

“Many are getting into debt and finding that accessing crisis support like food banks is the only way to get by. Our frontline advisers are already seeing these dire consequences of the cost of living crisis. 

“The government has a crucial opportunity to intervene before things escalate even further. We’d urge them to act now and increase benefits in line with inflation this December.”

Notes to editors

1. Citizens Advice modelled the number of households facing crisis using median expenditures from its debt management process for essentials like food and energy, adjusted for household type. Expenditure was based on the median budgets of 18,500 people who came to Citizens Advice between August and October 2021 for help managing debt. The model combined this spending with reported fixed costs such as housing in the Living Costs and Food Survey, to estimate the minimum amounts people could spend to meet their basic needs. Inflation was applied to these categories.
   The model then compared reported income from the last wave of the Living Costs and Food survey (2019/2020) to this minimum budget, to estimate what proportion of households already have insufficient income to meet their essential costs and what proportion were close to being unable to meet their essential costs. Reported income had average earning inflation applied.

2. Yonder Data Solutions interviewed 2,029 UK adults, online, between the 10th and 11th of November 2021. Data were weighted to be demographically representative of all UK adults aged 18+.
   Citizens Advice conducts a monthly survey of frontline staff. 435 people responded to the October survey with 318 (73%) reporting an increase in the number of people coming to them unable to afford essential household costs such as food, rent and heating.
   Gordon’s* name has been changed to protect his identity.

3. Citizens Advice includes the national charity; the network of independent local Citizens Advice charities across England and Wales; the Citizens Advice consumer service; and the Witness Service.
4. Citizens Advice is the statutory consumer advocate for energy and post. We provide supplier performance information to consumers and policy analysis to decision makers.
5. The Citizens Advice Witness Service provides free, independent support for prosecution and defence witnesses in every criminal court in England and Wales.
6. Citizens Advice offers Pension Wise services at 500 locations in England and Wales.
7. Citizens Advice’s services are free, independent, confidential and impartial, and available to all regardless of race, gender, disability, sexual orientation, religion, age or nationality.
8. To get advice online or find your local Citizens Advice, visit citizensadvice.org.uk
9. For consumer advice, call the Citizens Advice consumer service on 0808 223 1133 or 0808 223 1144 to talk in Welsh.
10. We helped 2.6 million people face to face, by phone, email and webchat in 2017-18. For service statistics see our monthly publication Advice trends.
11. Citizens Advice staff are supported by over 23,000 trained volunteers, working at over 2,500 locations in England and Wales.