The ‘grim’ reality for low-income families (the bottom 40% of all household incomes equivalent to 11.6 million across the UK) is that if they can’t make ends meet, there are three options:

• Go without essentials
• Fall behind essential bill payment
• Take on debt.

A briefing paper by the Joseph Rowntree Foundation looked at the ‘precarious’ position of this group.

Its research revealed 5.2 million low-income households have either cut down on or skipped meals, or gone hungry because there wasn’t enough money for food in the previous 30 days.

Some 3.2 million have been unable to adequately heat their homes since the start of the year. For 2.3 million, rather than choose between heating or eating, they’ve gone without both.

And for 4.6 million households, they’re in arrears on at least one kind of bill such as rent, council tax or utilities, or they’re behind on borrowing repayments.

JRF revealed this group also owe around £22bn in debt, with £3.5bn owed to high-cost credit providers such as doorstep lenders, pawn brokers and loan sharks. A further £2.3bn is to be repaid under buy now, pay later contracts.

For those households already in arrears, 88% are going without at least one essential. However, three quarters have taken on new or increased borrowing.

But, for those on means-tested benefits who are subject to benefit deductions (money taken directly from benefits to repay debts owed to government or utility suppliers), this is making things worse, the JRF said.

It found 94% of Universal Credit recipients with a deduction are going without essentials, but a high number (76%) without deductions are also cutting back.

More than half (53%) with deductions are going without four or more essentials.

And for ethnic minorities, renters, large families and lone parents, they are all more likely to go without.

The report’s authors, Katie Schmuecker, principal policy adviser and Rachelle Earwaker, senior economist, noted that the government’s cost of living package announced in May “does a better job of providing targeted relief to poorer families, providing £1,200 on means tested benefits”. But for those lower-income households with average arrears of around £1,600, “the payment will barely touch the sides, let alone help prepare for the winter that is coming”.

They wrote: “Rather than lurch from emergency response to emergency response, we need the government to get ahead of the problem. A simple thing that can be done quickly is to immediately stop deducting debt repayments from benefits at unaffordable rates, as it is clearly making an already bad situation far worse. As this report highlights, almost all families facing deductions are going without essentials like food, a warm home or toiletries, and are falling behind on bills.”

The JRF have made the following recommendations:

• The government must immediately stop deducting benefits at unaffordable rates, which further reduces the already low level of support available to families. And it shouldn’t be taking deductions to repay central government (DWP/HMRC) debts at higher rates than it expects for other creditors:
• The cap on total deductions from the standard allowance of Universal Credit should be lowered from 25% to 15%.
• Within this, deductions to repay debt to central government should be capped at 5% of the standard allowance.
• The government should increase basic Universal Credit entitlements to ensure it always, at a minimum, enables people to afford the essentials when they fall on hard times.

A government spokesperson, said: “We know people are facing rising prices due to global pressures, which is why we’re providing targeted help of at least £1,200 to eight million low income families – welcomed by the JRF – while supporting people to earn more, including a £300 a year tax cut in July and allowing Universal Credit claimants to keep £1,000 more of what they earn.

“We have both reduced the amount that can be taken through deductions twice in recent years to no more than 25%, and doubled the time period over which they can be repaid. This strikes a balance between people keeping the significant proportion of their payment and making sure priority debts are paid, such as child maintenance which is vital to parents raising children.”