ALT Poorer families in Britain are spending more of their income on essentials The poorest half of working-age households now spend 49% of their non-housing budgets on essentials like food, utility bills, clothing, childcare, and transport, up from 42% in 2002. Meanwhile richer households now spend 41% of their budgets on essentials, up from 37% in 2002.

ALT This cost increase comes despite many essentials falling in price. The cost of clothes has fallen by 37% in real terms since before the financial crisis. Fuel is cheaper in real terms today than it was in 2002. While the recent surge in ‘cheapflation’ on low-cost groceries increased rates of food insecurity, food prices are still 11% lower than the OECD average.

ALT But energy costs have skyrocketed. Between 2000 and 2019, the cost of gas and electricity doubled in real terms. These costs shot up further between 2019 and 2023, with annual bills rising from £1,200 to £2,051. While energy prices have come down from the 2023 peak, total household energy debt has more than doubled, from £1.6 billion in Q4 2019 to £3.9 billion in Q4 2024.

ALT A social tariff could help struggling families with energy bills. Offering a 10% tariff discount to the poorest two-fifths of households in England and Wales would cost £1.6 billion. This the same as the expected cost of the re-introduce Winter Fuel Payments, but better targeted at those who need help the most.