How the rising cost of living is leaving families uncertain

• Article and analysis by Granada Reports Apprentice Journalist Ajai Singh

The rising cost of living is creating a "real burden" for families experts say as the crisis shows little sign of easing.

The crisis is made up of a toxic cocktail that includes soaring inflation; energy prices increasing; higher fuel prices; and higher rent and mortgage payments.

The energy price cap is set to surge to nearly £3,550 in October 2022.

Inflation has soared to over 10% and some experts fear inflation could soar to 18% in 2023.

As a result, the ability to buy essential goods is being pulled further out of reach for many families.

For instance, between May 2021 - May 2022, the price of essentials such as a pint of milk has increased by 24% and the price of bread increasing by 8.6%.

For families already struggling to make ends meet, the work of the Hope Centre in Partington, Manchester is a lifeline for them and for those who have had to cut back in response to surging prices.

The centre's food parcel scheme at the People's Church allows parents to collect five days worth of food which includes bread, fresh fruit, cereal and tinned food.

74-year-old Cath, a volunteer at the scheme, said the scheme was vital to families.

"They'd be dire," she said of her their circumstances if the scheme was not in place.

Tearfully, Cath added that due to supporting the families long term, she has formed close relationships with many of them - revealing that it feels "awful" to see them struggling more so over the past few months.

She added: "It doesn't matter what their circumstances are, they need help."

For volunteer Leanne, who works night shifts as a carer, she has had to cut back on simple activities she could once afford.

"The kids don't like it," she said. "They want to go to the beach but we can't because of the price of petrol."

In addition to childcare, Leanne and her husband work around 70 hours a week between them, with her working three 12 hour shifts a week. But they still struggle to meet day to day costs.

Being responsible for child care during the day, Leanne sees volunteering as an extension of her work at the church.

She said: "Even though I don't have lot in my pocket, I can do something to make a difference."

In addition to the food parcel scheme, the church also runs a separate fun day in which parents and children are able to play on bouncy castles and slides. This is open to the whole local community.

It's a welcome relief from not just the boredom and stress the summer holidays can bring, but also from being excluded from stimulating activities that parents could once afford.

Stephanie, a teacher who came to the fun day with her children said that rising energy prices has been a significant pressure on her budget.

In a recent survey by the Office for National Statistics, over 50% of people cut back on gas and electricity.

"I was in credit at £300," she said. "I'm now in -£150."

She added that petrol was also a significant strain.

Previously, going to the zoo would have been an usual expense in the summer holidays for the children, but with prices reaching up to £200, it's something she has had to avoid, illustrating how mind broadening activities are further pricing families out.

"You have to deal with it." she reflected.

For Lynn and Louise, both former nurses, the fun day provides a welcome relief from surging prices.

Lynn relies on her workplace pension for her income but has recently had to dip into her savings, with gas and electric being the biggest pressure.

"Everything has gone up." she explains.

Around 23% of people have had to dip into their savings, according to the Office for National Statistics.

Louise said that increasing prices have limited holiday activities, with a typical family day out costing nearly £100.

"This is a lifesaver." she says of the activities.

With energy costs set to rise in October, Lynn and Louise are are bracing themselves for the impact.

Lynn, who has grandchildren, is "dreading" the increases in Autumn.

She added: "A uniform costs about £100 and we haven't thought about shoes yet. It's just one thing after another."

Ruth Lancey, Manager at the Hope Centre, says the work of organisations like hers is "literally a lifeline."

She shared how many of the families the centre supports are struggling to pay their bills.

"They can't heat their babies' bottles." she reveals.

Ruth believes that support while welcome, "doesn't scratch the surface."

She fears that the situation will deteriorate if the government doesn't step in to do more.

She says: "Absolutely, I believe that people will freeze and starve to death.

"There's no tightening of belts left. They've cut out deodorant, basic household appliances, people are skipping meals.

"There's nothing left to cut."

One of the most significant burdens that young families are bearing is the increasing cost of child care.

The cost of putting a child under two in childcare for 15 hours a week is nearly £138 - with full time costs reaching over £260 per week.

Whilst children aged three to four years old get 15 hours per week of childcare for free, and working families earning over £139 per week get 30 hours of free childcare, families are still struggling to make up the costs.

One reason for this is that government subsidies do not fully cover nurseries' running costs - meaning those rising costs are often passed on to parents including paying for lunch and additional activities.

The government says it has invested £4 billion in each of the past five years on supporting families with childcare.

Megan Jarvie, Head of Coram Family and Childcare, explained how the balancing act between childcare and career progression is leading parents to make "difficult choices."

In a 2021 survey of 20,000 parents, a third said that childcare costs exceeded their rent or mortgage payments.

With nurseries also facing rising costs, Megan added those extra costs could be passed onto parents.

But term time childcare is only one part of an increasingly creaking system. Although holiday clubs are a vital lifeline for many working parents, Megan revealed how the cost of holiday camps can double. She called these costs "worrying."

She believes that the potential for affordable child care is immense for both children and the wider economy but fears policymakers are overlooking this opportunity.

For example, a 2021 study from the Nuffield Foundation found that the effect of early childhood education on GCSE results was more than twice as large for children whose parents had lower educational qualifications than the wider population.

Furthermore, investing in childcare could boost women's incomes by up to £10 billion - helping to alleviate the sharper ends of the cost of living crisis.

As a result, making childcare much simpler to navigate for parents will allow more women to get back into work - which could help to alleviate the cost of living crisis for families and also provide children with intellectually stimulating activities.

But Megan suggests that there is little indication at the moment that the issue is being taken seriously and says there needs to be more "ambitious reform."

A Government spokesperson said: “We have spent more than £4 billion in each of the past five years to support families with the cost of childcare. The number of childcare places available remains stable, as it has since 2015, and thousands of parents are benefitting from this support.

“We know there are challenges facing the sector, which is why we are increasing funding to support employers with their costs, investing millions in better training for staff working with pre-school children and have set out plans to help providers run their businesses more flexibly. This includes plans to support more childminders into the market by reducing upfront costs.”

"Reform" has been a significant word when it comes to solutions to address the cost of living crisis.

Whether that is reform to the energy price cap; reform to childcare; reform in housing; reform in tax, this crisis has brought into sharp focus very serious questions about how will people make ends meet.

It's clear that "tightening belts" will only make a marginal difference - IPPR also found that poverty amongst working households stands at over 17%.

But with many of these questions, there are practical policy steps that can be taken.

With the energy price cap rising to £3,350 in October 2022 and potentially surging to to thousands more in January, there is little indication that institutions are able to grip the issue.

For example, a report by the independent National Audit Office found that customers will have to bear £2.7 billion of costs associated with the collapse of energy providers.

In addition, households owe £1.3 billion to their energy suppliers. In the face of greater prices, this is likely to grow.

With the Bank of England raising interest rates from 1.25% to 1.75%, this is likely to put greater pressure on people paying their mortgages, for example.

Whilst the point of raising interest rates is to dampen spending (thereby trying to curb inflation) and encouraging people to save, the reality is that many will struggle to save in the face of rising costs.

Despite this cocktail of pressures, experts suggest that are short term and medium term steps that the next Prime Minister can take to ease the burden.

Rosie Lockwood, Head of Advocacy at think tank IPPR North, suggests retrofitting homes with insulation and heat pumps will save people money and can also be a levelling up opportunity - creating 77,000 jobs in the North.

The measure could save hundreds of pounds on people's bills and has support from both the Labour Party and many Conservative MPs.

Due to the impending increases, Rosie is calling on the next Chancellor to have an emergency Budget to freeze the energy price cap and to have a windfall tax.

She added: "This will help to prevent further families from being pulled into fuel poverty and destitution this winter."

Mentioning that around a quarter of jobs in the North are paid below the real Living Wage, she said "these kinds of bills are just impossible to meet" for many families.

With around 12% of people in the North West living in fuel poverty, Rosie believes "far more action needs to be taken immediately so that families don't face these impossible choices this winter."

The potential Prime Ministers and the Labour Party have also set out their ideas. Liz Truss has promised to have an emergency budget within weeks of her taking office as well as promising tax cuts and Rishi Sunak has promised to cut VAT and provide extra payments to households.

Labour's plans include freezing the energy price cap at its current level of £1,971 for the average household, insulating 19 million of the coldest homes over the next decade and investing in renewable and nuclear energy.

The party said scrapping the planned increases in the price cap would cut inflation by 4%, making future interest rate rises less likely.

But the current government is refusing to provide any more help until a new Prime Minister takes over. The next Prime Minister's plans will take weeks to come into effect before the October price cap increase and Labour is unable to implement its plans unless a Conservative government agrees.

In the midst of this political uncertainty, many households will be worrying about spiralling into debt, with significant numbers of working households at a loss of how to cope with further rises.

While there is no end in sight currently to these issues, Ruth is optimistic.

She is hopeful about the number of volunteers who have come out to help and hopes that those more fortunate will donate their £400 energy payments to charity.

But with the current cost of living announcements seeming almost relentless, and the NHS warning of a "humanitarian crisis", it is clear that policy will need to rise to the occasion.