"Everybody across the income spectrum in the UK is going to see increasing costs," said Garry Lemon, policy and research director at the Trussell Trust, which supports more than 1,300 food bank centres across Britain. "But if your income is extremely low, then these inflationary pressures ... are particularly worrying and are going to have a huge, disproportionate impact on those at the bottom." For many a little further down the income scale, already struggling to make ends meet, food banks might become one of their options this coming winter, said Lemon at the Trussell Trust. "I'm quite pessimistic about it at the moment," he said. "It's going to be a really, really tough winter and beyond. And I think that we're unfortunately going to see an increasing need for food banks because the protection for those people just isn't there."
Rising mortgage rates, fuel and grocery prices soaring, national insurance contributions going up and queues growing at charity food banks across Britain. Add fallout from COVID-19 and Brexit, and economic and policy analysts say Britons faces a deepening cost-of-living crisis. Rising living costs have been exacerbated by an increase in personal tax rates, driven by the government's attempts to claw back the costs of COVID-19 and fund long-term social care.
"We've hit a perfect storm for many people," said Sue Weightman, project manager of the Trussell Trust food bank in the town of Taunton, in western England. "There are just too many points of pressure financially for people on benefits and also low-income families."
Resolution Foundation, a think-tank, estimates that the tax burden on households by 2026-27 will be at its highest level since 1950 due to a combination of freezing threshold levels for income tax and higher national insurance contributions. "That effectively increases the income tax people are paying over the next four years up until 2025," said Karl Handscomb, senior economist at the organisation.
According to the Foundation's figures, this could mean as much as an additional 3,000 pounds ($4,103) - on average - in income levies per household by 2026-27.
With further rises expected in inflation combined with sluggish pay growth, the Institute for Fiscal Studies (IFS) think-tank has warned of stagnating living standards over the next five years. "Average wages have basically stagnated since the financial crash in 2008," said Xiaowei Wu, senior research economist at the IFS. "In terms of the impact on the average family, this is quite a dire picture."
'Perfect storm': Poor Britons caught in cost-of-living squeeze (trust.org)
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