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Cost of living crisis: Larger families warned they could be in 'real trouble'

Swinging A-frame sign outside the Trussell Trust's Kingston Foodbank, Kingston, United Kingdom. The sign directs people to the foodbank which provides emergency food to local people. Two men are waiting outside the foodbank to receive their free food box which will contain basic non-perishable food for three days. In 2012-13 foodbanks fed 346,992 people nationwide. Of those helped, 126,889 were children. This form is used by a Trussell volunteer when preparing a food box for an adult. In resp (Photo by In Pictures Ltd./Corbis via Getty Images)
A report by Resolution Foundation has warned that large families will suffer most as the cost of living crisis continues in the UK. (Getty)

An economist has warned "larger families are in real trouble" as the cost of living crisis is set to get even worse.

The independent Resolution Foundation think-tank said the group's latest findings were an additional, unwelcome cause for concern for many families facing financial hardships.

In a major report released on Monday, it warned that the biggest impact of dramatically falling living standards is yet to hit – with the typical income for a working age family set to drop by 3% in the year to the end of March, followed by a 4% drop over the following 12 months.

Emily Fry, an economist at the foundation, said "larger families" could be left especially exposed: "2022 was a grim year for living standards. Inflation reached its highest level in 41 years driven by globally rising prices for energy and goods.

"In 2023, tax threshold freezes will create fiscal drag, mortgage costs will rise, and pay growth continues to be below inflation. Incomes are set to have their biggest fall in 2023/24 since 1975 suggesting we are just half-way through this cost of living crisis."

Summing up the report, she said "larger families are in real trouble" and that "despite wholesale price falls, the peak of energy bills is ahead of us".

Proportion of children living in relative poverty, after housing costs, by number of children in the household. (Resolution Foundation)
Proportion of children living in relative poverty, after housing costs, by number of children in the household. (Resolution Foundation)

The Living Standards Outlook report includes predictions that large families are more likely to suffer poverty, that child poverty will rise even further, and that hikes in household bills show no sign of easing.

Mounting pressure has been put on families as energy bills and food costs continue to rise.

The report analysed child poverty rates by the number of children in the household.

It found that rates for families with one or two children are very similar to each other, but rates for larger families are much higher – matching findings on food insecurity.

Economist Emily Fry has warned that the UK is only half way through the cost of living crisis, and that larger families will suffer most as it continues. (Resolution Foundation/Twitter)
Economist Emily Fry has warned that the UK is only half way through the cost of living crisis, and that larger families will suffer most as it continues. (Resolution Foundation/Twitter)

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The report reads: "It shows that the forecast rise in relative child poverty is driven entirely by larger families."

Relative child poverty in families with three or more children is set to hit 50% in 2025-26 and 55% in 2027-28; 77% of children in families with four or more children will be in relative child poverty by 2027-28.

Researchers said that key contributors to the statistics are the "two-child limit" – the government’s controversial cap on benefits which was designed to limit the amount of benefits large families could receive. They said the cap "disproportionately affects families with children and high housing costs".

The report also found that larger families are also more likely to be worried about their energy bills, with 63% of families with three or more children saying they are worried about their bills this winter, compared with 42% of families without children.

And the authors of the report warned that the cost of living the crisis is not even at the halfway point, but already millions are struggling to cope with massive increase in outgoings.

LONDON - NOVEMBER 6:  A photo illustration of a child benefit form, November 6, 2012 in London, England. The British Government are thought to be considering proposals to limit child benefit to a family's first two children in an effort to save on the welfare bill. (Photo by Getty Images)
Resolution Foundation said the government’s controversial cap on benefits for families with more than two children could plunge many more into relative child poverty. (Getty)

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They said nearly a quarter (23%) of adults who responded to its survey, equivalent to 12 million people in the UK, said they could not afford to replace or repair their fridges, washing machines or other large electrical goods, compared with 8% before the COVID pandemic.

The researchers also found 11% said at some point over the last month they went hungry because they did not have enough money, while before the pandemic 5% said they went hungry for lack of money.

Among the poorest fifth of families, more than a third said their health had been affected by the rising cost of living.