Inside the UK’s ‘stressful’ cost of living crisis Burnham hopes to tackle

Her own housing benefit payment is 1,800 pounds ($2,440) a month, against rent of 2,500 pounds ($3,390) for a private property with the downstairs toilet she and her late husband both needed because of their cancer treatment. She has fallen behind, and expects to be evicted.

“The day the bailiffs come round, I must be packed and ready to go into the housing they put me in,” she said. “Who knows where I’m going to end up?”

‘Damaging structural factors’

The UK has been in an acute cost of living crisis since inflation surged from late 2021, driven initially by pandemic disruption and then by the spike in energy prices after Russia’s invasion of Ukraine.

But for households like O’Hara’s, the strain runs deeper, with its roots in more than a decade of austerity, weak wage expansion and stagnant productivity, compounded by the economic impact of Brexit.

That longer history is central to Prime Minister Andy Burnham’s political pitch. To tackle the UK’s cost of living crisis, the new premier has set out a 10-year plan built around expanding social and affordable housing, reforming Universal Credit and investing in local economies.

He is currently touring the nation to engage with residents’s financial concerns.

Universal Credit is meant to act as a safety net, but for many, including O’Hara, it no longer stretches far enough to cover it.

“We estimate 7.4 million low-income families were unable to afford at least one essential item in the last six months,” said Sam Tims, the charity’s lead analyst, pointing to cutbacks on heating, toiletries and food. “This is at a record high.”

Tims traced the roots directly to policy choices.

“The combination of all these damaging structural factors has left our economy weaker, our wages lower, our rents higher and our income safety net in need of repair,” he said, noting that the basic rate of Universal Credit backing is lower now than a decade ago.

He welcomes the removal of the two-child benefit limit in April, estimated to have lifted about half a million children out of poverty, but argues it needs to be paired with a “protected minimum floor” in Universal Credit and higher local housing allowance rates to produce private rents affordable again.

Adam Lang, director of policy at Carnegie UK, says the think tank’s polling indicates just more than a quarter of households could not afford an unexpected 850-pound ($1,150) expense, and one in 20 cannot afford to feed everyone at home.