Charities warn people face risk of destitution

Families will still face enormous challenges in making ends meet, despite the support package unveiled to combat the cost-of-living crisis, according to money experts.

Charities also said Chancellor Rishi Sunak is “kidding himself” if he believes the problem is temporary, as calls were made for longer-term changes to the social security system.

The chancellor’s package of targeted Government support includes a £650 payment to more than eight million low-income households on Universal Credit, Tax Credits, Pension Credit and legacy benefits, with separate one-off payments of £300 to pensioner households and £150 to people receiving disability benefits. These groups are among the most vulnerable to rising prices.

Households will also receive a £400 discount on their energy bills from October.

Sarah Coles, senior personal finance analyst at Hargreaves Lansdown, said: “Unfortunately, the sheer scale of energy price rises mean that despite the support announced today, a huge number of families will still face enormous challenges in making ends meet.

“What’s more, by waiting until October to provide the energy grant, there’s a real risk that people’s financial resilience will be completely exhausted by then.”

Christians Against Poverty’s director of external affairs, Gareth McNab, said the charity is dealing with some households with much higher deficits than the amount of support offered in the package.

He added: “The simple truth is that while more generous, even these payments will fail to keep many out of destitution.”

Imran Hussain, director of policy and campaigns at Action for Children, said: “The measures announced today will help, but won’t fully shield families with children from the pain they’re experiencing.

“With more mouths to feed, more rooms to heat

“Chancellor kids himself if he thinks the problem is temporary

and more clothes to wash, families with children feel price rises the most and are at greatest risk of falling into poverty.

“Ultimately, we need a stronger social security system to ensure all families with children can meet their basic needs.”

Alison Garnham, chief executive of Child Poverty Action Group said: “The chancellor is kidding himself if he thinks that the problem is temporary or that the package he offered today will stop people finding themselves so far back that they never recover.”

The timing of Mr Sunak’s announcement has been viewed with suspicion in Westminster, coming a day after the release of Sue Gray’s report detailing the lockdown-busting parties in No 10.

The chancellor denied it was a distraction tactic.

The Confederation of British Industry’s chief economist Rain Newton-Smith acknowledged the need to help households through “one of the worst cost-of-living crunches in recent memory” but the windfall tax “sends the wrong signal to the whole sector at the wrong time against a backdrop of rising business taxation elsewhere”.

Analyst Sarah Coles.