Poverty and the cost of living

a report from JRF by Adam Tinson, Peter Kenway, Sabrina Bushe and Tom MacInnes

This research looks at how the relationship between poverty and the cost of living differs between population groups. It also identifies the policy decisions made by government or public bodies that have a direct influence on the cost of some essential items.

The research finds:

• Essential goods and services that people need to participate in society take up a relatively larger share of low-income budgets. These costs have risen relatively sharply in recent years.
• People on low incomes are less likely to be ‘active consumers’, switching suppliers and shopping around. This is partly due to a lack of access to ‘enabling goods’ that give consumers advantages such as a bank account or internet access.
• Regulators are increasingly using the concept of ‘consumer vulnerability’ – a more dynamic and flexible concept than that of ‘disadvantaged groups’. However, there are concerns over how it can be used in practice, and how poverty and low income fit into this framework.

The study looks at how policy options can target the cost of living and its link to poverty – focusing on low-income households, high-cost households or the whole population but with particular benefits to either low-income or high-cost groups.

Summary report (PDF 4pp)

Full report (PDF 54pp)

---