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New research into impact of ‘Cost of Living Emergency’

New research just out from the Resolution Foundation, “Hoping and Coping: How families were faring in March 2023″ has provided a new insight into the Cost of Living Emergency. The research, gathering information from 10,000 adults aged 18 and above, was carried out in March to assess how households were managing as the winter came to an end.

Key findings included:

  • Almost half (46 per cent) of respondents said that their financial situation in March 2023 was worse than in December 2022
  • 30 per cent of all respondents – or 16 million adults – stated that their health had been negatively affected by the rising cost of living, but this rises to 71 per cent among those who report that their financial situation is a lot worse, and 77 per cent among those finding their debt a heavy burden
  • A fifth of survey respondents reported being in food insecurity, and one-in-four adults cannot afford basic essentials. These alarmingly high figures, similar to the levels reported in a November 2022 survey, are significantly higher than comparable survey results in 2019-20: moderate or severe food insecurity was three times higher than in 2019-20
  • Almost half of adults used their savings to get by this winter. Having sufficient savings is crucial because it prevents individuals from resorting to more concerning coping mechanisms, such as accumulating debt or falling behind on bills
    • But using savings is not an option for everyone, with 15 per cent (8 million) of adults reporting that they had no savings at all by March 2023, rising to almost a quarter (23 per cent) in the bottom-income quintile
  • Around 14 million (26 per cent) adults had used formal lending, such as credit cards and overdrafts, to make ends meet between December 2022 and March 2023, with over a third (37 per cent) of 35-44-year-olds using debt to make ends meet
  • The role of informal networks in helping individuals cope with financial shocks cannot be overlooked.  But many do not have friends and family members able to help
  • Despite the different means that people have relied on to get by during the past winter – be that cutting back, drawing down savings, or relying on friends and family – for many adults, it has not been enough to prevent significant hardship
  • Over 40 per cent of adults are showing signs of poor mental health and emotional distress

Susan McEniff, CEO of Charity Link, says: “The data from this new research gives a bleak, but unsurprising, picture of how the cost of living crisis is impacting on people, particularly the most vulnerable in our communities.

“Some believe that we are over the worst of the crisis, with energy prices likely to decrease later in the year. However, the reality is that prices will remain significantly more than they were prior to the crisis and much more than many low-income can afford. Inflation remains high and we expect low-income households will continue to struggle to make ends meet during the year ahead, at least.

“Every day at Charity Link we see the negative impact that financial pressures put on the health and wellbeing of those impacted. With the support of the local community, the essential items that we provide to those in financial hardship, from food, to help with utilities, to clothing, beds, cookers, fridges and washing machines, help to ease some of the burden and improve dignity, health and wellbeing during these difficult times.  We will continue to work passionately to meet the increase in need that the cost of living crisis is presenting and we thank everyone for their support in helping us to do so.”

Read the full research from the Resolution Foundation on their website here.

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