Nearly all large families on low incomes trapped in hardship by cost of living pressures - JRF
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Low-income families are no better off one year after Labour's
election victory, new research finds. The situation is
particularly worrying for larger families, with today (Thursday 10
July) also seeing the publication of the latest official figures on
families affected by the two-child limit in Universal Credit.
[1] The Joseph Rowntree Foundation (JRF) surveyed families in
the bottom 40% of incomes and found no improvement in how they were
coping on...Request free trial
Low-income families are no better off one year after Labour's election victory, new research finds. The situation is particularly worrying for larger families, with today (Thursday 10 July) also seeing the publication of the latest official figures on families affected by the two-child limit in Universal Credit. [1] The Joseph Rowntree Foundation (JRF) surveyed families in the bottom 40% of incomes and found no improvement in how they were coping on JRF's key measures of hardship compared to the year prior. Over 7 million low-income families are still going without essentials, like food, heating and basic toiletries. [2] Going without the essentials is the reality for almost all large families on low incomes Families with three or more children were more likely than ever to be behind on paying their bills since 2022 when the research began. Larger families were also at very high risk of going without essentials. The number of larger families forced to take out loans to pay for essentials has risen in every wave of the analysis and is now at the highest level since 2022. For low-income families with three or more children:
The government has committed to giving every child the best start in life as part of its Opportunity Mission. [3] Expanding family services and making high-quality early education and childcare more accessible as promised this week will improve disadvantaged children's lives but it must be complemented by measures to boost incomes. The Prime Minister has also said that he is determined this government will drive down child poverty, as committed to in Labour's manifesto. [4] The most cost-effective way to reduce child poverty at scale would be for him to follow through with his stated wish to see the two-child limit removed in Universal Credit as part of the government's child poverty strategy. The two-child limit restricts support for children in families who receive Universal Credit to the first two children in a family. As a result, larger families typically lose out on £3,514 per year for each third and subsequent child born after April 2017. This has a direct impact on child poverty rates for larger families. The benefit cap, which caps the total amount of support an out of work family can receive, should also be limited by introducing a protected minimum floor in Universal Credit. [5] People on disability benefits on low incomes face unacceptable levels of hardship Low-income families where someone has a disability also faced higher rates of hardship compared to low-income families with no disabled people. 7 in 10 were going without essentials (69%) compared to 54% of families with no disabled people. Rates are even higher for working-age families who receive disability benefits [6]. Nearly 8 in 10 (78%) of these families going without essentials rising to almost 9 in 10 (88%) for families with children. The prospect of deepening this hardship has fuelled much of the concern and anger at the Government's proposals to cut disability benefits. Maudie Johnson Hunter, Economist at JRF, says: "A year after the country voted for a party promising change, families on low incomes are no better off. For them it is the same story of going without essentials, falling behind on bills and taking on debt. Far from getting on with their lives, the cost of living is still grinding them down. "The government can rewrite this story of enduring hardship. It has already begun with its plans to give children the best start in life by expanding family services and making high-quality childcare and early years education more accessible. But record numbers of large families are in arrears or have no choice but to take out loans to pay for essentials. Scrapping the two-child limit in Universal Credit would make an immediate difference to these children's lives. “The government must put families' financial security at the heart of everything they do. They must get on with giving low-income families some breathing room from the latest bill rise or overdue rent payment. Only then can we swap out the present story of precariousness with one of stability for every family." Notes to Editors [1] These figures are set to be published here: https://www.gov.uk/government/statistics/announcements/universal-credit-statistics-on-two-child-policy-april-2025 [2] The JRF cost of living tracker is a survey of 4,000 households created to monitor the living standards of low-income households in the UK. It focuses on the financial situation of households in the lowest 40% of equivalised household income, including whether they are falling behind on bills or using loans to get by. It also looks at households' ability to meet their costs for essentials like food, energy, housing, and transport. Where we have scaled up the survey findings to population level this has been done by JRF, and uses population numbers based on the HBAI 2022–23 survey. [3] https://www.gov.uk/government/publications/giving-every-child-the-best-start-in-life [4] https://labour.org.uk/wp-content/uploads/2024/06/Change-Labour-manifesto-2024-screen-reader.pdf [5] https://www.jrf.org.uk/child-poverty/three-policies-to-reduce-child-poverty-this-parliament [6] Either Universal Credit health related elements (Limited Capability for Work and Limited Capability for work Related Activity) or Personal Independence Payment (PIP). [7] At the Joseph Rowntree Foundation, we work to speed up and support the transition to a future free from poverty, in which people and planet can flourish. |