Cost of living: this crisis is far from over
For many Citizens Advice clients March hasn’t been much to write home about. It’s true the economy didn’t contract as predicted. Inflation still looks likely to be in low single digits by Christmas. The chancellor listened to Martin Lewis (and us!) and held the energy price guarantee at £2500 until June (December would have been better). Energy suppliers have been told to stop charging prepayment customers a supplement. But this crisis is far from over.
The February inflation announcement – up – apparently shocked everyone except people who buy food, drinks and go to cafes or pubs. Prices of essential products and services remain sky-high (food inflation now 18.2%). The Office of Budget Responsibility said the country would experience a record fall in living standards in the 2 years to March 2024.
Debt, benefits, crisis support
As 2022-23 unfolded the number of clients seeking help with debt – energy, council tax and rent – rose steadily. Benefits, tax credits and the need for crisis support (charity grant or food bank) also increased but more slowly. Need for help with Personal Independence Payment rose through the year. PIP is our most common benefit call and for many linked to cost-of-living issues.
New social tariff?
Meanwhile our Research & Campaigns team is helping promote fresh ideas for energy policy including a social tariff. This is a timely intervention from national Citizens Advice. Energy bills are forecast to stay high for the rest of the decade and the latest national briefing* heard 2023 described as “the year of debt crisis”. Which unhappily is where we came in.
This item appears in the CAEE March Newsletter.
* Next national Citizens Advice cost-of-living briefing is Thursday 11 May at 11am with guest speakers Paul Johnson, Director, Institute of Fiscal Studies and Carys Roberts, Director, Institute of Public Policy Research. Sign up here.