Money Wellness
Image of a man with his head in his hands looking worried at a laptop. Working and in debt. What financial support is available for people working. Debt advice for working people
category iconcost of living
calendar icon29 Apr 2024

Working households £7,800 a year worse off since the cost of living crisis

Costs for working households have risen £7,800 a year because of rising inflation, according to the Labour party.

This comes on top of the £870 bill households face from increasing council tax and frozen income tax thresholds.

It means that since the last election, the average cost of the weekly household budget has increased by £150 because everyday bills for utility, food, petrol, and clothes have all increased – despite tax changes meaning working people take home more in their pay packets.

The huge hit to inflation doesn’t include increasing mortgage costs, with millions set to be worse off when it comes to remortgaging this year.

Rachel Reeves, Labour’s Shadow Chancellor, said: “At the end of the month, people should be able to see their hard work has paid off. But even accounting for the tax changes in the Spring Budget, working families are facing higher costs for everyday things like food, clothing, and bills.”

Labour’s announcement follows new figures that show almost three million people in full-time work in the UK are in problem debt. With about a fifth of those in full-time work living in a negative budget – where their outgoings exceed their income. And about a quarter put their rising debt levels down to cost-of-living pressures.

What benefits can you claim if you’re working but struggling to make ends meet?

If you’re working but on a low income, there are a number of benefits that you might be entitled to that could help, such as:

  • Universal credit
  • Housing benefit
  • Support for mortgage interest
  • Mortgage interest run-on
  • Council tax reductions
  • Warm home discounts
  • Social tariffs

Policy in Practice estimates that around £18.7 billion goes unclaimed in income-related benefits and social tariffs each year.

We help hundreds of people each day who are struggling with debt and not claiming all the support they should. Use our free benefits calculator to find out if you’re missing out on vital support.

Avatar of Caroline Chell

Caroline Chell

Caroline has worked in financial communications for more than 10 years, writing content on subjects such as pensions, mortgages, loans and credit cards, as well as stockbroking and investment advice.

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