Changes in family spending – which Westminster’s Climate Change Committee (CCC) forecast will ultimately save the average household £1,080 a year in 2050 – will be the key to the next phase in Britain’s decarbonisation drive, but policy must ensure these gains are shared with poorer families, the Resolution Foundation said this week.
The CCC’s Seventh Carbon Budget shows that households cannot continue spending in the same way, with close to half of emissions reductions needed by 2040 made by changes to spending on surface transport (27 per cent), home upgrades (14 per cent), and flying (5 per cent).
The scenarios set out show that these changes should benefit families in the form of net savings in every year from 2026. The Foundation calculates that by 2050, the poorest fifth of households could see the share of their spending that goes on energy bills and driving cut by 6 percentage points.
But while the net zero transition will bring savings overall, there are also costs to switching to new technologies, particularly heat pumps, which the CCC estimate will still cost three times more a year than a gas boiler in 2050. And without government support, high upfront costs risk locking lower-income families out of the future savings that net zero will bring.
The Foundation notes that the poorest fifth of households currently have only 9 per cent of electric vehicles, while over the past decade heat pumps were more than twice as likely to be installed in the richest neighbourhoods than the poorest ones.
A successful net zero transition must ensure the costs and benefits are spread fairly. The CCC analysis suggests that a household without a car in the lowest-income quintile would save nothing, while a richer car owning household would see average benefits of £1,400 a year.
The Government should therefore look at ways of smoothing the transition by helping poorer families with the additional costs of heat pump installation and by designing fair alternatives to taxes like Fuel Duty.
Zachary Leather, Economist at the Resolution Foundation, said:“The CCC’s report highlights how the next phase of Britain’s decarbonisation drive will directly affect families’ day-to-day lives.
“While politicians fret and argue about the cost of net zero, today’s report shows that there are long-term benefits for consumers and the environment.
“But the high upfront costs of net zero technologies like EVs and heat pumps risk locking lower-income households out of the savings that they bring in the long run.
“A successful transition will require Government to get serious about supporting lower-income households in accessing heat pumps and EVs.”
Defence spending to increase to 2.5% of GDP from April 2027, with an ambition to reach 3% in the next parliament.
Reinvigorated approach to defence industry will drive economic growth and create jobs across the UK, while bolstering national security and protecting borders.
Commitment will see the biggest investment in defence spending since the Cold War as the UK enters era of intensifying geopolitical competition and conflict.
As the UK faces a period of profound change, with conflicts overseas undermining security and prosperity at home, the Prime Minister has today (Tuesday 25 February) set out that his commitment to increase spending on defence to 2.5% of GDP from April 2027.
He has also set an ambition to spend 3% of GDP on defence in the next parliament, as economic and fiscal conditions allow, in order to keep the British people safe and secure for generations to come.
As set out in the Plan for Change, national security is the first duty of the government. In recent years, the world has been reshaped by global instability, including Russian aggression in Ukraine, increasing threats from malign actors, rapid technological change, and the accelerating impacts of climate change.
The Prime Minister yesterday set out how the UK will be stepping up to meet this generational challenge with a generational response.
The announcement comes the day after the third anniversary of Russia’s barbaric illegal war in Ukraine and shows that the UK will step up and meet this pivotal moment of global instability head-on, with a commitment that will see the biggest sustained increase in defence spending since the Cold War.
The Prime Minister knows that the working people of Britain have paid the cost of malign actors abroad, whether through increased energy bills, or threats to British interests and values. He is committed to making the country safer, more secure, and increasingly resilient against these interconnected threats.
Today’s announcement demonstrates the UK’s global leadership in this space. In calls with foreign leaders over the weekend, the Prime Minister reiterated the UK’s commitment to securing a just and enduring peace in Ukraine and the need for Europe to step up for the good of collective European security.
The investment in defence will protect UK citizens from threats at home but will also create a secure and stable environment in which businesses can thrive, supporting the Government’s number one mission to deliver economic growth.
The increased spending will sustain our globally competitive industry, supporting highly skilled jobs and apprenticeships across the whole of the UK. In 2023-24, defence spending by the UK Government supported over 430,000 jobs across the UK, the equivalent to one in every 60.
68% of defence spending goes to businesses outside London and the South East, bolstering regional economies from Scotland to the North West.
Through the upcoming Defence Industrial Strategy, this substantial investment will drive R&D and innovation across the UK, including developing technologies such as AI, quantum and space capabilities.
Prime Minister Keir Starmer said: “It is my first duty as Prime Minister to keep our country safe. In an ever more dangerous world, increasing the resilience of our country so we can protect the British people, resist future shocks and bolster British interests, is vital.
“In my Plan for Change, I pledged to improve the lives of people in every corner of the UK, by growing the economy. By spending more on defence, we will deliver the stability that underpins economic growth, and will unlock prosperity through new jobs, skills and opportunity across the country.
“As we enter this new era for national security, Britain will once again lead the way.”
In addition to our plan to reach 2.5%, the Prime Minister also announced that the definition of defence spending will be updated to recognise what our security and intelligence agencies do to boost our security, as well as our military. This change means that the UK will now spend 2.6% of GDP on defence in 2027.
This shift recognises that the activities of our intelligence increasingly overlap and complement that of our Armed Forces, emphasising the need for total deterrence against the modern hybrid threats we face, from cyber-attacks to sabotage.
The increase in defence spending will be funded by reducing Overseas Development Assistance (ODA) from 0.5% to 0.3% of GNI and reinvesting it into defence.
This difficult choice reflects the evolving nature of the threat and the strategic shift required to meet it whilst maintaining economic stability, a core foundation of the Plan for Change. Meeting the fiscal rules is non-negotiable, and the government will take the tough but necessary decisions to ensure they are met.
The UK remains fully committed to making the world a safer and more prosperous place. In the current geopolitical environment, the Prime Minister is clear that the best way to do that is by deterring and preventing conflict and targeting our aid more effectively.
For example, we have delivered an increase of £113m in humanitarian funding for people in Sudan and those who have fled to neighbouring countries, which will help to reduce migration flows to the UK and help address one of the major humanitarian crises of our era.
The government remains committed to reverting spending on overseas aid to 0.7% of Gross National Income, when the fiscal conditions allow.
This comes alongside an ongoing review into ODA spend which will ensure that every pound of development assistance is spent in the most impactful way.
This increase in defence investment will help us build a modern and resilient Armed Forces. It will accelerate the adoption of cutting-edge capabilities that are vital to retain a decisive edge as threats rapidly evolve. Targeted investment will reverse the hollowing out of recent decades and rebuild stockpiles, munitions, and enablers depleted after a period focused on international terrorism and global crises.
This modernisation will be supported through improved productivity, efficiency, and financial discipline across defence.
The Prime Minister has also committed to publishing a single new national security strategy, bringing together all reviews into one document and reflecting the decisions on resource set out today. This will be published following the Spring Statement next month and ahead of the NATO Summit in June.
The new commitment on spending comes ahead of Prime Minister’s visit to Washington DC this week, where he will tell President Trump that he wants to see the UK-USA bilateral relationship strengthened and deepened even further, to secure the prosperity and security of both nations for decades to come.
The government has already significantly increased investment in its national security capabilities, increasing spending on defence by nearly £3 billion in this year alone at the Budget. In addition to growing the defence budget, spending on the Single Intelligence Account was increased by around £340 million between 2023-24 and 2025-26, ensuring that our world-leading intelligence agencies maintain their cutting-edge capabilities.
Street Child condemns UK Aid Cuts: “You can’t have global security without global development”
Charity founder Tom Dannatt opposes government decision
Street Child strongly opposes the UK Government’s decision to fund increased defence spending at the expense of international aid, warning that the move will have devastating consequences for the world’s most vulnerable children.
“Street Child are horrified that we’re effectively making the world’s very poorest people foot the ENTIRE increase in UK defence spending,” said Tom Dannatt, CEO & Founder of Street Child.
True global security is built on education, self-sufficiency, opportunity, and stability—not through slashing life-changing development aid.
The UK has long played a leadership role in education and development, driving progress and fostering stability alongside global partners.
By stepping back now, rather than stepping up, the government is not only threatening hard-won gains but also retreating from its shared responsibility – weakening vital partnerships and diminishing the impact of past investments.
Right now, 251 million children worldwide are being denied their right to education, including 72 million out of school due to crises such as armed conflict and displacement.
Without urgent action, these children face futures marked by poverty, exploitation, and instability—fuelling the very crises the UK seeks to prevent.
“Investing in international education isn’t charity; it’s a strategic necessity,” continued Tom Dannatt. “A more educated world is a safer, more prosperous world for everyone — including the UK.”
We know that as governments around the world take a step back, the role of the private sector, philanthropists, and other donors becomes even more critical.
Their sustained investment is needed now more than ever to ensure children are safe, in school, and learning. The cost of inaction will be far greater—for the world’s most vulnerable and for global stability.
Cancer death rates are around 80% higher for people living in the most deprived areas of Scotland compared to the least deprived, a new report from Cancer Research UK reveals.
The report, titled Cancer in the UK 2025: Socioeconomic Deprivation, found that there are around 4,300 extra cancer deaths in Scotland each year linked to socioeconomic inequality. This equates to 12 additional deaths each day – around a quarter of all deaths from cancer.
Almost half of these additional deaths are caused by lung cancer, where the death rate for the most deprived areas is almost three and a half times that of the least deprived areas of Scotland.
More than a tenth of all cancer diagnoses in Scotland are linked to deprivation. Many of these cases are caused by preventable risk factors such as smoking.
Smoking is the biggest cause of cancer in Scotland, and rates in the most deprived parts of the country are more than four times those in the least deprived.
In publishing the report, Cancer Research UK is calling for urgent action to tackle these stark inequalities.
One vital opportunity to do so is the upcoming vote in Scotland for new legislation which will see an increase in the age of sale of tobacco.
If MSPs vote for the new Tobacco and Vapes Bill, it would become illegal to sell tobacco to anyone born after 1st January 2009.
This vote will pave the way for the Bill to become law in Scotland, as well as the rest of the UK.
Dr Sorcha Hume, Cancer Research UK’s public affairs manager in Scotland, said: “Where you live shouldn’t increase your risk of dying from this devastating disease.These figures are shocking and unacceptable and crucially many of these cancer deaths are avoidable.
“With almost half of the additional deaths being caused by lung cancer, it’s clear that action on smoking is needed urgently.
“Smoking remains the leading cause of lung cancer, a disease that is often diagnosed late when treatment options are more limited.
“One of the ways we can prevent lung cancer is to deter people from ever taking up smoking in the first place.
“If MSPs vote in support of the age of sale legislation in the Tobacco and Vapes Bill, it could be one of the most impactful public health interventions in living memory, helping people to live longer, better lives, no matter where they live in Scotland.”
Introducing a lung cancer screening programme in Scotland would also help address these inequalities.
The UK National Screening Committee has recommended that all UK nations move towards implementing a national lung cancer screening programme to target those considered to be of high risk of developing lung cancer – people aged between 55 and 74 who either smoke or used to smoke.
A targeted lung screening programme is being introduced in England, but no such commitment has been made by the Scottish Government.
If lung screening were to be introduced, around 400 extra cases each year in Scotland could be diagnosed at an early stage (stages 1 and 2) rather than a late stage (stages 3 and 4).
Dr Hume added: “Lung screening matters because it means more people can be diagnosed at an earlier stage, when treatment is more likely to be successful.
“Research has consistently shown that lung screening is effective at reducing deaths from cancer so it’s essential a Scotland-wide programme is introduced here as soon as possible.”
Reacting to the 2023 Scottish House Condition Survey results, Debbie Horne, Scotland Policy and Public Affairs Manager at Independent Age said: “The latest statistics released today show that 317,000 older households (37%) were in fuel poverty in Scotland in 2023, with 1 in 4 older households (25%) living in extreme fuel poverty.This is extremely concerning and shows a step change will be required to meet Scotland’s fuel poverty targets.
“As well as this, almost half (49%) of people in later life live in homes with an EPC rating of band D or below. Cold homes are hazardous to health, especially for older people. Every day, our helpline hears from people in later life who are wearing a coat indoors, washing less and skipping meals. In a socially just and wealthy nation no older person should be in fuel poverty.
“While it is welcome that the Scottish Government is working with energy companies to encourage them to put in place social tariffs for financially vulnerable customers, there is more that can be done.
“We’re calling on the Scottish Government to urgently create a strategy to tackle pensioner poverty. With 317,000 older households in fuel poverty, this can’t come soon enough. Today’s figures underscore the need for strategic action to lower bills by improving energy efficiency support and making sure the energy social security older people can access is sufficient.”
Fuel poverty targets were introduced in Scotland through the Fuel Poverty (Targets, Definition and Strategy) (Scotland) Act 2019.
Interim targets for 2030 state:
a) no more than 15% of households in Scotland are in fuel poverty,
(b)no more than 5% of households in Scotland are in extreme fuel poverty.
If you are anxious about debt or struggling to keep on top of bills, you are definitely not alone! Rising costs in energy, groceries and fuel has resulted in lots of people struggling to cope.
Granton Information Centre is here to help you with free, confidential, and impartial advice. If you would like to make an appointment with one of our advisers, please get in touch on 0131 551 2459 or 0131 552 0458 or email appointments@gic.org.uk
Thousands of families will be helped as part of the Scottish Government’s plans to remove the two child benefit cap, First Minister John Swinney has said as he repeated calls for the UK Government to end the policy immediately.
The First Minister made clear that if the UK Government was to scrap the policy, the investment the Scottish Government intends to allocate to its mitigation would be used on other measures to tackle eradicate child poverty.
At an event in Stirling hosted by The Robertson Trust, Mr Swinney addressed representatives from community and third sector organisations across Scotland and set out his vision for a country in which no child lives in poverty.
The First Minister said: “The eradication of child poverty is my government’s number one priority, and I want it also to become our nation’s number one goal.
“The cornerstone of our approach is investment in more dignified and generous social security support.
“It includes the resources we need to build the systems that will allow us to effectively remove the two child cap for families in Scotland.
“I can offer two guarantees today. Firstly, if we are able to safely get the systems up and running in this coming year, the first payments will be made in this coming year – helping to lift thousands more children out of poverty.
“And secondly, if the UK government does the right thing and abolishes the two-child cap across the UK, the resources we have committed to this policy will continue to be used on measures to eradicate child poverty in Scotland.”
The Scottish Fiscal Commission has also published estimates of the number of children in Scotland impacted by the two-child limit this year, and who would benefit from mitigation were it to commence in 2026-27 (39,000 in 2025-26, rising to 42,000 in 2026-27.
Amazon supports with the launch of You Buy. We Donate which will donate thousands of hygiene products to local families in need
The Big House Multibank is a charity initiative formed by former Prime Minister Gordon Brown and Amazon, which has donated essential items to over 120,000 families in need acrossScotland
The Big House Multibank in Fife is calling on local residents to support its drive to combat hygiene poverty in the region and help to ensure children can return to school this week feeling comfortable in their own skin.
To kick-start the campaign, Amazon has joined forces with its suppliers of well-known household brands including Unilever, L’Oréal, and Colgate-Palmolive to deliver thousands of hygiene products to families in need acrossFife via The Multibank charity.
According to a recent survey for The Hygiene Bank, teachers are spending £40 million out of their own pockets to combat the effects hygiene poverty in the classroom as 1 in 4 children (28%) are reported to be regularly missing school because they or their clothes or kit are not clean.
FormerUK Prime Minister Rt Hon Gordon Brown, said:“I’m delighted Amazon, whose surplus stocks are already a mainstay of Multibank goods, are launching a multi-business collaboration amongst hygiene companies to increase the amount of hygiene goods supplied to our Multibanks. I thank all the companies involved.
“We know The Multibanks are making a real difference keeping hard-pressed families facing the future with some hope of better days ahead. We must now keep innovating how we do charitable work in our communities because too many children need the help right now and teachers tell us that keeping kids clean and smelling fresh is for them a priority issue.”
Kirsty Thomson, CEO of The Big House Multibank, said: “Rising living costs are forcing people into impossible situations where they’re having to choose between feeding their families, and keeping them clean.
“Family finances are under even more pressure during the winter months so we are grateful to Amazon and its suppliers for their commitment to unlock more hygiene products which will provide life-changing support to the most vulnerable in our communities.”
John Boumphrey, Amazon UK Country Manager, said:“We are incredibly proud to have supported the foundation and growth of The Big HouseMultibank.
“We want to support their drive to combat hygiene poverty across the region helping as many families in need as possible. By working together with our suppliers and our customers, we hope to generate hundreds of thousands more donations.”
Chris Barron, General Manager for Personal Care UK&I at Unilever, said:“The support that The Multibank provides is so important, helping households that are facing hygiene poverty to access the daily products that help people to feel clean and confident.
“We know that together we can do more, so we’re really pleased to be partnering with Amazon with a shared commitment to get more products to the charities and people that need them most.”
Brands participating in You Buy. We Donateare Amazon brands by Amazon, and Mama Bear, as well as, Dove, Elvive, Colgate, Garnier, L’Oréal Paris, Lynx, Men Expert, Nivea, Palmolive, Radox, Revitalift, Sanex, SheaMoisture, Simple, Sure, Tommee, Tippee TRESemme, and Vaseline.
Transport logistics specialists, Palletline is providing logistics support for the campaign free of charge, handling the storage and onward distribution of all donations to The Multibank’s network of regional hubs.
JOSEPH ROWNTREE FOUNDATION’s COST OF LIVING TRACKER – WINTER 2024
The Government must tackle stagnant levels of hardship as part of their mission for growth, with worse living standards to come if no action is taken.
As Rachel Reeves unveiled her first budget for the new Labour Government, the 7th wave of our cost of living tracker captured the experiences of low-income households in the UK.
Collected between 8 and 31 October, surveying 4,065 households in the bottom 40% of incomes, our key measures of hardship remain entirely unchanged from 6 months ago, despite some key economic conditions easing. We find in October 2024 (see Figure 1):
7 million low-income households (60%) were going without the essentials in the previous 6 months, including 5.4 million experiencing food insecurity in the previous 30 days
4.3 million low-income households (37%) were in arrears on at least one household bill or credit commitment.
We also find around a 3rd of households (34% or 4 million households) held a loan they originally took out to pay for food, housing or essential bills worth around £9.6 billion in October 2024.
These findings of stalled progress track with our microsimulation modelling, which shows that disposable incomes after housing costs are forecast to fall over the rest of this parliament. Households in the bottom 40% of incomes are projected to be £440 worse off per year in real terms by October 2029, compared to October 2024.
If the Government are serious about ending the need for emergency food parcels, tackling child poverty and growing the economy, they must take bold action to prevent living standards from deteriorating further, and build strong foundations for household economic security for the future.
Economic context: flatlining disposable incomes
Our modelling shows that disposable incomes after housing costs for households in the bottom 40% of incomes fell in October 2021 and have flatlined since (see Figure 2).
This is caused by a complex economic picture of high prices and recovering wages:
Inflation has returned broadly to target since April 2024, at around 2%, however high inflation since the end of 2021 has baked in higher prices in areas such as food, and other costs such as energy are rising again.
Private rents have continued to increase ahead of inflation, up 8.7% in the year to October 2024.
Interest rates have now seen two cuts, to 4.75%, but the full impact of elevated interest rates is still feeding through to mortgage costs.
Real earnings growth returned from mid-2023, but has slowed this year, while the National Living Wage increased by 9.8% in April 2024.
From April 2024, benefit rates were uprated by 6.7%, and LHA was unfrozen with an average annual increase of £785 per household, so our data reflects several months of these uprated payments.
Going without essentials
The number of low-income households going without essentials like food, heating and showers remains at 7 million in October 2024, entirely unchanged from 6 months ago. This number has not dropped below 7 million since October 2022, showing persistent and embedded hardship in the UK (see Figure 3a).
Low-income households are routinely going without enough food, with 5.4 million unable to afford enough food in the 30 days prior to the survey in October 2024 (46%). This includes 5.2 million families cutting down or skipping meals (44%), and 3.8 million going hungry (32%) (see Figure 3b). While food insecurity is down from a peak of 5.9 million households, or half of all low-income households in October 2023, it is unchanged from May 2024 (46%).
Some groups within low-income households continue to face very high risk of going without essentials. In October 2024, 86% of low-income households on Universal Credit (UC) went without essentials and 82% of low-income private renters in receipt of housing benefits.
Neither group has seen any improvement since the last survey, with uprating and unfreezing of housing benefits in April 2024 only maintaining existing levels of hardship. Other demographics at high risk of going without essentials include 87% of lone parents and 85% of families with 3 or more children, around 8 in 10 households with a black respondent (81%) and around three quarters of private (76%) and social renters (75%) (see Figure 3c).
For the first time, we can report on families in receipt of different health and disability related elements of UC, who will be amongst those subject to the Government’s benefit reform.
We find around 9 in 10 low-income households receiving the Limited Capability for Work element (90%) and Limited Capability for Work and Work-Related Activity element (88%) were going without essentials in October 2024.
The recent Get Britain Working white paper signalled a welcome reset in approach to supporting disabled people into work. But making arbitrary cost savings of £3 billion the starting point for reforms risks undermining this and leaves uncertainty hanging over disabled people at greatest risk of hardship.
We have also seen no progress on the depth of hardship, with the number of essentials households are going without flatlining. Of those who are going without essentials, we have consistently seen around a 3rd going without 4 or more essentials in every wave of the survey (see Figure 3d). Families on Universal Credit are almost twice as likely to be going without 4 or more essentials than families not on any benefits in October 2024 (45% compared to 24%).
There has been no progress on the number of households in arrears, with 4.3 million low-income households (37%) behind on at least one household bill or credit commitment in October 2024, completely unchanged from the 6 months before (see Figure 4a).
Overall low-income households owe around £6.1 billion in arrears across all household bills and credit commitments. £2.3 billion of this is owed on bills with high consequences if you fall behind, including council tax, rent or mortgage payments and energy bills. For example, falling behind on council tax bills could make you liable to pay a years’ worth of council tax immediately. In October 2024 12% of low-income families are in arrears on their council tax, owing an average amount of £540.
Around 1.5 million low-income households (13%) are currently in arrears on their energy bills before we even head into winter. Those who are behind owe an average of around £500, and 58% of these households are in arrears with 4 or more different bills. A member of JRF’s Grassroots Poverty Action Group told us how normally over the summer period they are able to get on top of energy bills they have fallen behind on during the winter, but this summer that wasn’t possible.
Rent arrears also remain stubbornly high, with 18% of renters behind on their rent, largely unchanged since October 2021. They owe an average of £620 in arrears for rent alone. We find 13% of renters prioritised their housing bills over their other bills in the last 12 months, but 38% of those who did that were unfortunately still in arrears with their rent, showing that many low-income renters are out of options. Arrears for mortgage holders have improved however, with 12% in arrears in October 2024 compared to 16% a year ago in October 2023.
Within low-income families, some groups experience far greater risk of being in arrears. Families where someone has caring responsibilities are almost twice as likely to be behind on their bills compared to families where there are no carers (55% compared to 29%), and are unsurprisingly more likely to be going without essentials too (76% compared to 53%).
Other groups continue to be at elevated risk of being behind on their bills, including 66% of households with a black respondent, and 6 in 10 families with 3 or more children (62%) (see Figure 4b).
However there are some positive trends with some of the most at-risk groups seeing a sustained fall in the proportion in arrears, including households with respondents aged 18-24, families on Universal Credit and lone parents. While still incredibly high, these are at least moving in the right direction.
As with the overall picture of arrears, progress on the depth of arrears has stalled. There had been a steady downwards trend in the amount of money families owed following a peak in October 2022 of £1,630, but this had stopped in October 2024. Of those in arrears, the average amount owed was around £1,430.
In May 2024 we saw a promising sign of the proportion of households behind on 4 or more bills falling, however this hasn’t continued in October 2024 with 3 in 10 or 1.3 million families who are in arrears behind on 4 or more bills (31%) (see Figure 4c). Being behind on multiple lending commitments and bills to different providers negatively impacts people’s credit file and their ability to borrow in future.
Being behind on your bills is one type of debt, while another is where families have used credit to pay for things. Taking on a loan in and of itself isn’t a bad thing, however it becomes concerning when families rely on credit to cover essentials, can only access high-cost credit, or fall behind on repayments.
While many of our key measures of hardship have remained unchanged, the proportion of low-income families who hold loans they took out to pay for essential costs has moved in the wrong direction. In October 2024, 4 million low-income households (34%) held £9.6 billion of loans they originally took out to pay for food, housing or essential bills like council tax or energy (see Figure 5a).
This is very similar to a year ago, when 3.8 million low-income households (32%) owed £9.2 billion for these essentials loans. Taking on debt to pay for essentials has not been enough to prevent hardship, with nearly 9 in 10 of these families going without essentials in October 2024 (88%) and 7 in 10 behind on their bills (71%).
In October 2024, 2.2 million low-income families (19%) held high-cost credit loans, from unregulated lenders (loan sharks), doorstop lenders, payday lenders or pawnshops (see Figure 5b). The proportion who hold these loans had been falling since October 2022, but it has now risen for the first time. While the value of high-cost credit and unregulated loans has increased to £3.2 billion in October 2024, it is still lower than a year ago, at £4.1 billion in October 2023.
The total amount of debt across all unsecured loans and credit (see methodology note) currently held by low-income households has also increased in October 2024 to £23 billion, up from £19 billion in May 2024 (see Figure 5c). While still less than the £26 billion peak in October 2022, debt levels are now back to levels seen in October 2023 (£22 billion). The proportion of families who hold each type of debt in October 2024 mirror our findings in October 2023. It is largely the proportion of households holding each type of loan which has driven the total amount of debt held back up, rather than the amount of debt held for each loan type increasing.
During the cost of living crisis there was a tightening in the availability of affordable credit, due to stricter eligibility requirements, high interest rates and regulatory changes. These factors are likely to have contributed to the fall in loans between October 2022 and May 2024. As interest rates now ease, the availability of unsecured credit now appears to be increasing according to lenders surveyed by the Bank of England.
The proportion of low-income families who applied for loans or credit stayed the same from May to October 2024 at 55%, with three quarters of those who applied approved (75%). However there was a decrease in the proportion of those who applied and were declined in the previous 6 months, down from 14% in May 2024 to 9% in October 2024. We will continue to monitor this, a greater availability of credit may allow more families to take on loans, as seen in the reduction in families being refused credit in the last 6 months.
The October 2024 Budget was big in terms of the increased tax take and investment, but in reality will deliver very little change for low-income households. There were some positive changes such as restoring spending on public services, reducing the amount of deductions from benefits and extending the Household Support Fund (albeit at a lowered level). However our modelling shows these changes will only have limited impact for low-income families and Government must go much further to meaningfully shift the dial on hardship.
Using microsimulation modelling we converted macroeconomic forecasts from the OBR into household-level impacts for the bottom 40% of incomes to show the outlook over the rest of this parliament1. We find that average disposable incomes after housing costs are projected to be £440 per year lower in real terms in 2029, than they are in October 2024. This is largely being driven by rising housing costs, which we can see (from Figure 6a) means that relatively flat gross incomes lead to declining net (post-tax, disposable) incomes once housing costs are taken into account.
Our latest modelling shows the variation in experiences for households across the income distribution. While households across the income distribution are forecast to see their living standards fall throughout the rest of the parliament, households in the bottom 20% of incomes see a significantly larger proportional drop (see Figure 6b).
This story has yet again set out the embedded levels of hardship facing low-income households in the UK, alongside modelling which shows a stark warning that things are projected to get much worse over the rest of this parliament.
JRF is calling for the Government to place economic security for households at the centre of their mission for growth, to place growth on a surer footing and ensure change is felt by households who need it the most.
Firstly, the Government must make immediate progress on bringing down hardship by:
introducing a protected minimum amount of support 15% below Universal Credit’s current basic rate, as a first step towards an Essentials Guarantee – this would restrict the amount of reductions to benefit payments, including from debt repayments and the benefit cap
reforming the Household Support Fund and Local Welfare Assistance in England so everyone has somewhere to turn for immediate cash help in a crisis
unfreezing LHA and permanently relinking it to local rents
expanding the Warm Home’s Discount, to increase the level of support and widen eligibility to include people in receipt of disability benefits
increasing the rate of means tested benefits for carers, to help protect those on the lowest incomes from poverty
from 2025, not pursuing similar cuts to those planned by the previous Government, and committed to by Labour, to Universal Credit’s Work Capability Assessment ‘activities and descriptors’
scrapping the ‘two-child limit’ on support for children in Universal Credit and tax credits.
Secondly, the Government must also build the foundations of a stronger social settlement that can provide real economic security for families now and in the future. This would mean an Essentials Guarantee in Universal Credit to ensure everyone has a protected minimum amount of support to afford essentials like food and household bills.
It would also mean reform to the housing system, including increased funding for social house building. It would mean introducing an energy social tariff, that will support low- and middle-income households through the transition to net zero, by targeting the high and rising energy costs families are facing.
It would mean reducing risks for disabled people wanting to work and improving trust in the social security system, by working with disabled people to develop a replacement for the Work Capability Assessment and implementing a comprehensive Work Transition Guarantee.
And finally, a rethink of our care infrastructure so that parents have access to the right kind of childcare that allows them to work if they want to, as well as proper financial support for people who need to temporarily step away from work to help care for a loved one.
Together, these changes build strong foundations in the social security system to build lasting economic security for all, so that we can finally stop reporting that 7 million low-income households are going without essentials.
Stores across the country have been overwhelmed by the generosity of customers who donated at the Tesco Winter Food Collection.
An incredible 1.9 million meals’ worth of long-life food items were donated at the collection between 25th November and 30th November in all the retailer’s large and Express stores.
In Edinburgh, the collection saw customers donate 24,451 meals to make a difference in their local community.
Every item donated provides much-needed support for charities FareShare and Trussell in the run up to Christmas.
Donations to Trussell help food banks to provide emergency food parcels to people who cannot afford the essentials, while donations to FareShare support thousands of frontline local charities in communities across the country.
This winter will see heightened levels of need for both charities’ services with the Christmas holidays being a particularly difficult time for families due to the increased costs that occur at this time of year. With this in mind, Tesco provided an extra £500,000 of funding to FareShare and Trussell to meet this acute need.
Tesco CEO Ken Murphy said: “I just want to say a huge thank you to every single person who donated items at this year’s Winter Food Collection. Their generosity is always so amazing and really helps to make a huge impact in communities across the UK supported by Trussell and FareShare.”
Throughout the year Tesco donates unsold food to FareShare as part of its Community Food Connection scheme. That means so far this year Tesco and its customers have given the equivalent of more than 39 million meals to both charities.
In addition to the donations of food, the pre-Christmas Winter Food Collection saw more than £340,000 donated to the charities by customers rounding up their bills at the till and donating through a link from Tesco’s online groceries website.
Kristopher Gibbon-Walsh, CEO at FareShare, said: “Every year, we are blown away by the generosity of Tesco customers at the Winter Food Collection, and this year is no exception.
“Thank you to every single person that volunteered in store, donated an item of food, topped up their shopping bill, or made a donation to FareShare. Your kind support will ensure we can continue getting food out into the community, bringing people together and strengthening communities this winter.”
Emma Revie, CEO of Trussell, said:“We are so grateful to Tesco for supporting food banks to get through this season by organising this year’s Winter Food Collection.Thank you to Tesco customers for coming out in support of your local food bank, to ensure they can continue helping everyone in your local community who is facing hunger and hardship this winter.
“Thanks to your efforts, we have collected 1.8 million meals to support people who need a food bank this winter. Thank you for your generosity – together we can end hunger for good.
“Food banks in the Trussell community are a last resort for people who’ve been left facing hunger and hardship. They’re a lifeline, offering a warm welcome and space to be heard. But with so many people unable to afford the essentials right now, food banks continue to provide exceptionally high levels of emergency food, with many telling us they are at breaking point.
“Just over 1.4 million emergency food parcels were provided across the UK by food banks in our community, between April and September this year.”
With both charities continuing to need support, Tesco shoppers can continue to donate food at permanent collection points at every Tesco store in the UK or make a donation after their online shop.
SCOTTISH BUSINESS OWNER SPEAKS OUT ABOUT THE TRAGIC STATE OF POVERTY IN SCOTLAND: “CHILDREN ACROSS THE COUNTRY WILL SPEND CHRISTMAS DAY WITHOUT A HOT MEAL, GIFT OR SAFE PLACE TO CALL HOME – WE NEED YOUR HELP TO BREAK THIS CYCLE OF HOMELESSNESS”
Founder of Scottish business, itison, Oli Norman, has spoken out about the ‘devastating’ level of poverty in Scotland this festive season. To tackle this, the company has once again launched its £5 Christmas appeal in a bid to raise thousands for people who are vulnerable and homeless this winter, in partnership with Social Bite.
The annual initiative, which allows generous Scots to buy a person, family, or child who is homeless or vulnerable a hot Christmas meal or gift for just £5, comes amidst news that more children in Scotland will be homeless and hungry this Christmas than ever before.
Over the last decade, the itison £5 Christmas Appeal campaign has raised more than £3 million, with 700,000 donations made, meaning hundreds of people each year are able to enjoy a hot meal or a gift on Christmas Day at one of Social Bite’s coffee shops. Every year, the number of people accepting these meals increases, with more and more people visiting Social Bite on Christmas Day to enjoy good company, warmth, and a hearty meal.
Social Bite and itison have surveyed the drastically declining rate of security for vulnerable people across Scotland since last year and work closely with people who receive support from Social Bite’s services to hear their stories.
Two regular attendees of the festive meals are father and son Jim and Billy. The pair have attended the Social Bite Christmas meals, in partnership with itison, for over five years. The meals mean so much to them that in past years, Jim and Billy have walked from as far as Rutherglen in to Glasgow to have their festive celebrations with the charity.
Billy said:“Every year that we’ve been has been brilliant. There’s no public transport on Christmas Day, so for a few years we walked in until my dad got a bit older.
“They welcome you in, you get a nice meal. It’s turkey, potatoes, you get your dessert. It’s good portions. Not too big, but it’s not too wee. And the gifts you get are unbelievable.”
Jim added: “Last year we got a charger for our phone, a pair of slippers, sweeties. Hats, scarves, gloves, a thermal to keep you warm when you’re outside. For a lot of people who are otherwise by themselves, who don’t get anything, they’re over the moon.”
Over the years they’ve got to know some familiar faces. But it’s the ones who don’t return – reflecting the instability and dangers of homelessness – that stick most with Jim and Billy.
Jim commented:“The thing that’s quite sad is you see a lot of people and then you don’t see them, because of their situations. You get to know people, and then you’re told ‘they’re no longer here.’
“It’s the young ones. One minute you see them, and the next year they’re not here.”
It was revealed earlier this year that the increase in homelessness in Scotland poses a ‘serious risk’ to life as a lack of accommodation is leaving people without somewhere safe to call home, forcing them to endure freezing temperatures and extreme weather conditions.
Oli Norman, owner of itison, said:“It’s 2024, and people are still going hungry, still without a decent home, still living on the streets, and still at serious risk because there is not enough accommodation for people who need it. The cost of living is still increasing, pushing more people into devastating poverty.
“There is simply not enough support for people who are, or are at risk of becoming, vulnerable and homeless. Families and children across the country will be spending Christmas Day without a hot meal, gift or safe place to call home – more must be done.
“We hope that once again our £5 voucher can bring some comfort to people who need it this festive season. We are urging people to please go online and buy a voucher for the same price as a coffee or a meal deal – we need your help to break this cycle of homelessness. Let’s act now.”
Social Bite founder Josh Littlejohn MBE said: “Social Bite is experiencing unprecedented rise in demand from people who are homeless across the country due to the national housing emergency and the increasing cost of living.
“The itison £5 Christmas appeal is a simple way for people to get involved and help bring some joy to people and families who are homeless and need it most this winter.
“For many people across the country, Christmas Day can be extremely challenging, but with the itison £5 voucher, you can give someone the chance to have a hot meal and enjoy some good company on what should be the most joyful day of the year.
“This year, you also can make a child’s day with a Christmas gift for £5. Thank you to the amazing Scottish public for your continued support this Christmas.”
In addition to the itison £5 Christmas Appeal, donations and gifts can be made to Social Bite’s Festival of Kindness online or at one of the Trees of Kindness located throughout the UK.
