HOUSEHOLDS face the “terrifying” prospect of the biggest squeeze in living standards for a century, a think tank has said.
Real household disposable incomes are on course to fall by 10% over this year and next, the Resolution Foundation has warned.
Households face the biggest squeeze in living standards for a century
This is the equivalent to £3,000 for the typical household.
It predicts that the number of people living in absolute poverty will rise by three million, to 14 million people in 2023-2024.
With real earnings falling at their fastest rate since 1997, the Resolution Foundation also warns that by the middle of next year, real growth pay since 2003 will be wiped out.
The think tank said that while the economic outlook is “highly uncertain”, the scale of the cost of living crisis means the new Prime Minister will need to offer household’s significant support.
Lalitha Try, a researcher at the Resolution Foundation, said: “Britain is already experiencing the biggest fall in real pay since 1977, and a tough winter looms as energy bills hit £500 a month.
“With high inflation likely to stay with us for much of next year, the outlook for living standards is frankly terrifying.”
It comes as the boss of Ovo Energy Stephen Fitzpatrick told the BBC helping low income families with energy bills “has to be the first order of business” for the next prime minister.
The energy regulator Ofgem confirmed last week that energy bills will rocket to £3,549 on average per year, piling further mister onto households.
The Tory leadership contest is due to end next week, with either Liz Truss or Rishi Sunak set to take over as Prime Minister.
How can I boost my income?
If you’re unable to work, have a full-time job or are maybe a stay at home parent, there are loads of things you can do to earn some extra money.
And the extra cash may go a long way for millions of households who are battling against a cost of living crisis.
If you are looking at making some extra money on the side, don’t be put off by the thought of paying more tax on the cash you make.
Normally, you’d have to pay tax on any earnings over the personal allowance for basic tax-payers, which is £12,570 for the current tax year running from April 6, 2022 to April 5, 2023.
But rules brought in back in 2017 means you can make some cash on the side tax-free.
You could try filling in online surveys, or by testing products.
We previously put together a guide to becoming a tester and the brands that offer these schemes, including some major names like Tesco and Philips.
HOAR has also compiled a list of some 50 ways to earn a bit of extra dosh on the side
What help is available?
From September the second, one million people receiving tax credits will receive the first half of the £650 cost of living payment.
The money will be paid in the same way you usually get your tax credits.
And from September 20, over six million people with disabilities are set to receive £150 to help with the rising cost of living.
From October the first, all UK households are set to receive the £400 energy bills rebate.
The payment will be made up of six discounts between October and March next year.
Households will receive a £66 energy bill discount in October and November and a discount worth £67 in December, January, February and March.
We’ve listed how the leading energy suppliers plan to pay households the discount and are waiting on others to respond.
The way you’ll be paid will depend on how you pay for your energy.
If you’re on a credit meter the discount will come off your bills, but if you’re on a prepayment meter you’ll get a voucher.
Check with your supplier to confirm how you’ll receive the cash.
In November, a £300 one-off “Pensioner Cost of Living Payment” will be paid out to eight million households.
It will be given to those who already get the winter fuel payment – which is worth between £100 and £300 for those over state pension age.
Payments for the £150 Warm Home Discount scheme will likely begin from December.
