Cost of Living Literature Review October 2022

1. Cost of Living Literature
Review: October 2022
Strategic Insight & Foresight

2. Overview
This literature review was compiled to get a sense of who is most at risk of the cost of living
crisis, and therefore who may be most likely to access BRC services in the coming months.
People in vulnerable situations Vulnerable places
It is split into 2 key themes:
“People in vulnerable situations” focuses on key
demographics who are struggling with the cost of living
crisis and may access BRC services.
This will focus on:
 Low-income families
 People with disabilities
 Migrants and ASRs
“Vulnerable places” focuses on key areas which are
struggling with the cost of living crisis and may require more
concentrated BRC services.
This will focus on:
 Northern England (cities)
 Devolved nations
Together, these themes should help us better understand who may be increasingly accessing
services and where this may be in the UK.

3. Setting the scene
The cost of living crisis is affecting most people in the UK,
causing worry and/or anxiety and causing many to re-evaluate
their spending and saving behaviours.
In the latest ONS survey (29th Sept – 9th Oct 2022), 77% of
adults were (very) worried about the rising cost of living,
and 93% reported their cost of living had increased
compared to a year ago. This has caused many to spend less
on non-essentials, use less fuel and energy, and spend
less on essentials.
ONS, 29 Sept – 9 Oct 2022
Those on lower
incomes, with more
dependents, and
with disabilities
are struggling more
than others with the
rising cost of living
Financial Fairness Trust, July 2022

4. Literature Review
and Themes

5. People in vulnerable situations: Low-income families
Low-income families, particularly those with multiple dependents and who claim benefits, are especially struggling with the
cost of living crisis. Poorer households are currently experiencing higher inflation, on average, than wealthier households.
It is estimated that in
October 2022, these
inflation differences
between the richest
and poorest
households will
continue to expand.
BRC analysis of Institute for Government data. Figures for April 2022
House of Commons Library, September 2022
Increased cost of living is also amounting to real-term cuts to benefit rates. In April
2022, benefits and state pensions were uprated by 3.1%. This was much lower than the
inflation rate at the time (9%) and projections for the rest of the year.
This is hitting families who also struggled through the Covid-19 pandemic. During the
pandemic, there was a rise in food bank use. Yet, throughout 2022, The Trussell Trust,
Citizens Advice, and IFAN reported a great demand for food banks and food parcels,
higher than in 2021. Food bank demands will likely increase through winter and
continued rises in inflation and cost of living.
JRF, May 2022

6. People in vulnerable situations: People with disabilities
People with disabilities are disproportionately affected by the cost of living crisis. Even before the cost of living crisis, people
with disabilities were likely to:
be unemployed have low incomes have increased costs
(especially on transport,
energy, and specialist foods)
Now, disabled households are twice as likely to be struggling with increased costs of living compared to non-disabled households.
People with disabilities, who were already more likely to live
in poverty than non-disabled individuals, are likely to be
some of the hardest hit by increased costs of living.
This increases when accounting for households with
disabled children and for older disabled individuals.
According to research published in October 2022 by Sense,
60% of adults in households with disabled children had
savings <£1,500 and 13% were food insecure.
abdrn Financial Fairness Trust, September 2022

7. People in vulnerable situations: Migrants and ASRs
Even before the cost of living crisis, migrants and asylum seekers and refugees (ASRs) struggled to survive on the amount of
financial state supported provided.
People going through the asylum system receive around £5.80 a day (£40.85 a week) to cover
all living costs, except for housing. They do not have the right to work, or the right to claim
mainstream welfare and housing benefits because they have NRPF. People in contingency
accommodation (incl. hotels and B&Bs) receive £8.24 a week.
The graph to the left shows that asylum payments are at an all-time low, in real terms.
As of March 2022, an ONS report found that the average cost of living per month for a single
person in the UK, with housing and utility costs deducted, was £1,042. An asylum seeker
received £190.40 in that same time frame. This highlights the extreme deprivation migrants
and ASRs face, and this is only growing worse.
A recent report from RGAP (July 2022) found that, from a cohort of people they supported in 2022:

8. Vulnerable places: Northern England (cities)
Inflation is higher in the UK’s poorest cities  many of these cities are in the North and the
Midlands, whilst cities in the South (particularly in the Greater South East) are relatively more
sheltered from rising costs of living.
Burnley, Blackburn, and Blackpool are the hardest hit, with inflation rates between 11% and
11.5%. This is nearly 3% higher than in Southern cities like London, Reading, and
Cambridge.
Such discrepancies exist due to:
 Vehicle usage
 Larger, more prosperous cities have more and better-quality public transport = less
reliance on private transport = less fuel needed
 Home energy efficiency
 Poor insulation, less energy efficient, more prone to leaking/dampness are
more prevalent in poorer cities = more energy = rising costs
 Income levels
 Less economic activity in poorer cities = more people in lower-paid jobs;
poorer households earn less but still have similar costs = higher proportion of
income on essentials where inflation is high
 Cities in the poorest areas are where real wages have declined the most
 Inflation reduced April 2022 wages in the North, Midlands and Wales by
around £915m (since April 2021), compared to around £750m in South
England
Centre for Cities, July 2022
Centre for Cities, July 2022

9. Vulnerable places: Devolved Nations
Devolved nations are especially vulnerable to cost of living increases
around fuel and energy, more so than England.
CPAG, August 2022
Scotland and Northern Ireland consistently experience colder winters
than England and Wales, and often require more energy to heat homes
and avoid damp and mould. As energy prices soar, households in these
nations are especially vulnerable to fuel poverty.
This is compounded by the poor
energy efficiency of homes,
particularly in Wales and
Northern Ireland, where 67% of
homes are below energy
efficiency targets.
A recent report by abrdn Financial Fairness Trust (July 2022) also
reported geographic variations in rates of serious financial
difficulties. They found that 21% and 22% of households in Scotland
and Wales, respectively, were facing serious difficulties compared
to 15% of English households.
Individuals in devolved nations report having less savings and are
cutting back on food, energy, and general spending at higher rates
compared to England.
BBC, March 2020

11. For further information contact Matt Thomas (Head of Strategic Insight & Foresight):
MattThomas@redcross.org.uk
British Red Cross Strategic Insight Team: Cat Reid, Clare Darlow, Elle Gordon,
Matt Thomas, and Mike Page.
With thanks to: [Anyone who helped]