Paying the cost of living

‘Cost of living’ is the phrase on everyone’s minds at the moment. In the same way that ‘social distancing’, ‘furlough’, ‘key worker’ and ‘self isolation’ entered our vocabulary during the pandemic and became common language, it’s now ‘cost of living’ that’s dominating conversation. And for good reason. Many of us are worried about whether we can afford to eat or heat our homes – and the impact will be worst for those who are already on the lowest incomes, or those who aren’t eligible for government support.  

But how much are we thinking about what we actually mean when we say the ‘cost of living’ is becoming ‘unaffordable’? If the cost of living is the price we pay for essentials such as food, warmth, and electricity – the things we need to live – then it begs the question: what happens when you can’t afford to pay the costs?  

Read the Deductions: Driver of Poverty report

Impact on people's lives

Perhaps the consequences feel too grave to think about. But many don’t have the choice. The small and local charities that we support are facing this question every day.

One charity we spoke to recently told us how their shower facilities, previously set up for people who were sleeping rough, are being expanded as many more people are now using them. Whole families are now coming in to use the showers because they can’t afford to heat water at home.  

Another charity reported to us that 100% of the people they work with are now using foodbanks. Charities themselves are also providing food to people where they haven’t previously, and their costs have risen hugely due to the increase in demand alongside rising food prices. Others have told us about the negative impacts on mental health or rising debt that they’re seeing. Even before the current crisis, our research showed that many people were struggling to afford the basic necessities due to as much as 25% being deducted from their Universal Credit payments.  

Rachel Cain - Public Affairs and National Programme Officer

Impact on charities 

Small charities are stepping up to support their communities, adapting and going the extra mile to ensure that people have the essentials they need to get by. But charities themselves are struggling to keep up with rising costs.  

Although the energy price guarantee will reduce some of the impact, it will not be enough for those on the lowest incomes who are already struggling, and the support for both charities and households has so far only been committed to for six months.  

Fuel, food and staffing costs for charities are continuing to rise, at the same time as income sources such as donations from the public are depleted. As more people turn to charities for support (such as with showers or food, as mentioned above), this means that charities are needing to use more energy, not less, so they are being hit by both prices and usage increasing. This leaves charities with incredibly difficult decisions to make, at a time when they need to expand their services to meet the increased demand for support.  

And let’s not forget that charities are made up of people – we know that staff and volunteers are also struggling and some are turning to charities themselves for support to make ends meet. They stepped up during the pandemic to support their communities, but after two years of sustaining a crisis response, they’re now struggling with burnout. The longer-term impact of dealing with this level of trauma on a daily basis is yet to be seen.  

With income stretched, charities face hard choices around staffing costs and are concerned about losing experienced, dedicated staff. At a time when their work is becoming increasingly demanding, charity staff are worried about their own ability to afford food and pay their bills. 

This cannot be the new normal 

It’s important that we keep talking about the cost of living, but let’s make sure we don’t become desensitised to what those words mean. In the same way that just a few years ago, food banks were uncommon in the UK but have now become a part of everyday life for so many people, it’s crucial that we don’t let ourselves slip further into a new normal – remembering what those words mean, who pays the price, and what this says about us as a society.  

At its most basic, the ‘cost of living’ is about what we need as human beings to stay alive. But we should be aspiring to more than that. We know that working at their best, the charities we support play a significant role in enabling people to live fulfilled, connected and healthy lives, but their ability to continue doing more with less can’t be taken for granted.  

Government must take action over the coming months to support those on the lowest incomes, ensuring everyone has enough to live on, and that charities have the resources they need to support their communities to weather the storm. We will continue working with others across the sector to track the impact of the current crisis, and advocate for further support. Because it’s not the cost of living that is unaffordable – it’s the consequences if we don’t act.