Soaring inflation and rising cost of living pushing families to crisis point

Prices are now rising at their fastest rate for 40 years, and UK inflation jumped to 9% in the 12 months to April, up from 7% in March. That figure is expected to continue to rise. Families are facing an ever-worsening cost of living crisis, that is affecting everyone – but particularly lower income households, and families with children. Lower income households are disproportionately impacted by rising inflation, spending a higher percentage of household income on home heating, electricity and food. This comes on the back of a decade of austerity measures with freezes and cuts to social security benefits, including the removal of the £20 per week uplift to Universal Credit in the Autumn.

Already, 1 in 4 children in Northern Ireland are living in poverty, and a report from the National Institute of Economic and Social Research suggest that extreme poverty, or destitution, could rise by 67% over the coming year, the highest level across all UK regions.

Behind the figures, what these pressures mean for families was brought into sharp focus in a recent report from Action for Children including:

  • A child having to stay off school with chilblains on his feet, due to his house being so cold, with the heating not on
  • Families eating their dinner in bed to keep warm
  • A family in Northern Ireland trying to heat a room by turning on the hob
  • Parents skipping meals to ensure their children can have enough food.

Rising costs are also impacting on childcare providers, who face significant bills for food, heating, electricity and transport. As a result, providers may have no choice but to increase their fees to continue providing their essential services. In turn, this could mean that childcare becomes unaffordable for some families, leaving some parents with no option but to leave the workforce or reduce their hours of work.

This is an impossible situation for so many, and with pressure mounting, there are growing calls on both the UK Government, and local politicians in Northern Ireland, to do more to support families struggling to weather this financial storm.

In the meantime, we are encouraging all families to speak to an independent advisor to ensure they are accessing all of the financial support they are entitled to. Our Family Benefits Advisors at Employers For Childcare are here to help, and the service is free, confidential and impartial (contact details below).

Uprate benefits in line with inflation

The UK Government needs to uprate benefits in line with current inflation figures, rather than sticking to the formula that used the September 2021 figure of 3.1%. While it will still be a difficult time for many, this move would at least address the current real-terms cut to benefits, and help protect families from the worst impacts of rising costs for essentials.

Increase the maximum monthly limits on support with childcare costs

We are also calling on the Government to increase the maximum monthly limits for childcare support through Universal Credit and Tax-Free Childcare. These have remained unchanged since the introduction of these forms of support, despite annual increases in the cost of registered childcare.

That means parents will not be getting support for the full amount of their childcare costs. As a result, parents may have no choice but to cut back their hours of work or, in some cases, come out of the workforce altogether. For further information on what this means for families, read our article here.

Deliver a Childcare Strategy and Anti-Poverty Strategy for Northern Ireland

A key factor in supporting families is to ensure that every parent can access and afford the critical childcare they need to get into, progress in and stay in work. Importantly, families also need to be aware of what financial support they are entitled to, and able to confidently access independent advice and guidance. This will help to maximise the income they retain, and reduce their living costs.

Critically, we also need to see the Northern Ireland Executive committing to the elimination of poverty through a robust Anti-Poverty Strategy, establishing new and ambitious actions for all Government departments, and underpinned by legislation that enshrines this commitment in law, including introducing a new Child Payment for Northern Ireland.

Work commenced on both Strategies in the last mandate, and they cannot be further delayed due to an extended period of instability and uncertainty. We urgently need a functioning Government in place with Ministers around the table agreeing the actions, and committing the resources, to ensure the promises of the campaign are translated into meaningful progress. For that, we require an Executive to be formed, Ministers to be appointed and our new MLAs to get on with the business that people have elected them to do.

Ensure you are accessing all the support you are entitled to

In the meantime, for further information or to make sure your family is getting all the support you are entitled to, please contact our Family Benefits Advice Service for free, impartial and confidential advice.

On a regular basis, our team speaks with parents and families who are missing out on financial support, particularly with the cost of registered childcare, because they don’t realise they are eligible. Access to financial support can make a real difference, generating significant savings for families. Over the last five years, our team has helped families identify £54.5 million in financial support they did not realise they were entitled to.

Alongside the financial savings, ensuring parents know where to go for advice and guidance can help to relieve some pressure and anxiety.

So get in touch today, and speak to one of our advisors on Freephone 0800 028 3008 or email