A tough winter of financial hardship looms
Many residents will be facing a lean winter. Guy Stenson says social landlords will be the de facto safety net
Many residents will be facing a lean winter. @guystenson says social landlords will be the de facto safety net #UKhousing“As household incomes look set to fall and expenditure soar, how will hard-working but low-paid families cope in the months to come?” asks @guystensonAfter the past tough 18 months, it might seem universally accepted that the last thing millions of cash-strapped families need is a cut in their income alongside a hike in household bills.
And yet that is exactly what they look set to face in the coming months.
Although the government heralded the £20-a-week Universal Credit uplift as ‘strengthen[ing] the safety net’ during the pandemic, this financial lifeline has been swept away despite protests from many quarters.
It is estimated that removal of the uplift will hit nearly six million people, including almost 40% who are in work, at a time when the support offered by furlough has just come to an end.
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The Joseph Rowntree Foundation calculates that the benefits cut will result in half a million people being pulled into poverty, including 200,000 children, and that working families with children will be affected most.
At Stonewater, we have been working to prepare for the impact on our own customers. According to figures from our online portal, nearly 8,500 of our residents receive Universal Credit, many of whom are in employment.
The pandemic has already brought financial difficulties for many households, evidenced by the rise we have seen in gross rent arrears, which is currently in the region of £1.28m, since March 2020.
The rising cost of heating our homes is another threat to struggling families. Figures from April 2020 estimated that 2.4 million UK households were already struggling with these bills, with COVID-19 pushing another 600,000 into that plight.
“As household incomes look set to fall and expenditure soar, how will hard-working but low-paid families cope in the months to come?”
As we head into winter, with energy bills set to soar due to spiralling fuel prices, many more people will be faced with the stark choice between a warm home or food on the table.
Workers pay the price
To top it all, next spring will bring a 1.25% hike in National Insurance – again, this is expected to affect people on lower wages disproportionately. The higher contributions are anticipated to leave low-paid frontline workers potentially more than £1,000 a year worse off.
Figures from the Institute for Public Policy Research suggest that working people in the UK are already struggling to make ends meet, with one in six families with two adults in employment (a staggering 17.4%) living below the breadline.
So, as household incomes look set to fall and expenditure soar, how will hard-working but low-paid families cope in the months to come?
At Stonewater, along with social housing providers up and down the country, we have done our best during the pandemic to help customers faced with financial hardship by giving support around benefits, flexible rent payments and charitable grants for those most in need.
In 2015, we recognised the impact government budget and welfare cuts would have on some of our customers and so we launched our charity partner, the Longleigh Foundation.
Longleigh is a grant-making charitable foundation dedicated to supporting the individuals and communities served by the social housing sector. It provides grants for individuals and families in financial crisis or hardship, as well as project and research grants.
Perhaps unsurprisingly, Longleigh experienced a 96% year-on-year increase in the funding provided for its individual hardship grants. These have proved a lifeline for our more financially vulnerable customers.
As a difficult winter looms and financial challenges worsen for working families, it seems that it will once again fall to understanding landlords and charitable organisations, such as Longleigh, to provide a much-needed safety net for these struggling households.
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