London Daily

Focus on the big picture.
Tuesday, Jul 22, 2025

Further 250,000 UK households face destitution in 2023, warns NIESR

Further 250,000 UK households face destitution in 2023, warns NIESR

Thinktank calls for urgent £25-a-week UC uplift and £250 one-off payment to cushion poorest from inflation

More than 250,000 households will “slide into destitution” next year, taking the total number in extreme poverty to around 1.2m, unless the government acts to help the poorest families hit by the energy price shock, according to the National Institute for Economic & Social Research (NIESR).

More than 1.5m households will see the rise in food and energy bills outstrip their disposable income, forcing them to rely on savings or extra borrowing to make up the shortfall, said the thinktank, which blamed welfare spending cuts since the Brexit vote in 2016 for leaving millions of families in a vulnerable financial position.

To prevent a jump in poverty levels, the government must raise universal credit payments by £25 a week immediately while handing the 11.3m lowest-income households a one-off cash payment of £250, NIESR said.

The dire situation facing many low-income families was likely to persist after the government committed only limited funds to its skills budget and levelling up agenda in the budget in March, it added.

Inflation, which NIESR forecasts to average 7.8% this year after peaking at 8.5% in the autumn – lower than the Bank of England’s 10% estimate – will fall next year, but the government’s reliance on loans to support poor families, which must be repaid over subsequent years, will mean poverty levels remain elevated.

NIESR said the main subsidy for fuel – a 5p cut in fuel duty – was badly targeted and would mainly benefit better-off drivers with the largest, fuel-hungry vehicles.

Explaining its outlook for the economy over the next three years – with lower growth and rising unemployment leading to a recession in the second half of 2022 – NIESR boss Jagjit Chadha said the government’s policies could be directly blamed for harming the real incomes of UK households.

“It is quite clear that fiscal policy could be used to smooth the income shock,” he said.

“Time and again we have been told that there is little room for manoeuvre when the weather turns unpleasant,” he said, when the government “had a £20bn borrowing capacity under its own fiscal rules that could be used to support poorer families”.

Chadha is a longstanding critic of the government’s austerity measures. He said successive governments since 2008 should have been more ambitious rather than leave much of the job of spurring economic growth to the Bank of England.

Looking forward, he said the government was wrong to accelerate balancing the books when it should be investing to level up the regions and protect the poorest in society.

An increase in universal credit uplift of £25 per week between May and October 2022 would benefit about 5.6m households and cost around £1.35bn. A one-off cash payment worth £250 per household for 2022-23 would cost £2.85bn.

Professor Adrian Pabst, NIESR’s deputy director for public policy, said: “Prices will push up bills, drag down demand and increase income inequalities. The big squeeze on budgets will hit the lower-income households hardest who live in some of the most economically and socially deprived parts of the country.

“To stop an additional 250,000 households from sliding into debt and destitution, the chancellor should instate a £25 per week universal credit uplift for at least 6 months.”

Newsletter

Related Articles

0:00
0:00
Close
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
Epstein Files Deepen Republican Party Divide
Zuckerberg Faces $8 Billion Privacy Lawsuit From Meta Shareholders
FIFA Pressured to Rethink World Cup Calendar Due to Climate Change
SpaceX Nears $400 Billion Valuation With New Share Sale
Microsoft, US Lab to Use AI for Faster Nuclear Plant Licensing
Trump Walks Back Talk of Firing Fed Chair Jerome Powell
Zelensky Reshuffles Cabinet to Win Support at Home and in Washington
"Can You Hit Moscow?" Trump Asked Zelensky To Make Putin "Feel The Pain"
Irish Tech Worker Detained 100 days by US Authorities for Overstaying Visa
Dimon Warns on Fed Independence as Trump Administration Eyes Powell’s Succession
Church of England Removes 1991 Sexuality Guidelines from Clergy Selection
Superman Franchise Achieves Success with Latest Release
Hungary's Viktor Orban Rejects Agreements on Illegal Migration
Jeff Bezos Considers Purchasing Condé Nast as a Wedding Gift
Ghislaine Maxwell Says She’s Ready to Testify Before Congress on Epstein’s Criminal Empire
Bal des Pompiers: A Celebration of Community and Firefighter Culture in France
FBI Chief Kash Patel Denies Resignation Speculations Amid Epstein List Controversy
Air India Pilot’s Mental Health Records Under Scrutiny
Google Secures Windsurf AI Coding Team in $2.4 Billion Licence Deal
Jamie Dimon Warns Europe Is Losing Global Competitiveness and Flags Market Complacency
South African Police Minister Suspended Amid Organised Crime Allegations
Nvidia CEO Claims Chinese Military Reluctance to Use US AI Technology
Hong Kong Advances Digital Asset Strategy to Address Economic Challenges
Australia Rules Out Pre‑commitment of Troops, Reinforces Defence Posture Amid US‑China Tensions
Martha Wells Says Humanity Still Far from True Artificial Intelligence
Nvidia Becomes World’s First Four‑Trillion‑Dollar Company Amid AI Boom
U.S. Resumes Deportations to Third Countries After Supreme Court Ruling
Excavation Begins at Site of Mass Grave for Children at Former Irish Institution
×