New way to explore the cost of living

What is the tracker?

A series of large-scale bespoke online polls of around 4,000 low-income households across the UK. We have been tracking the cost of living crisis and the financial impact of the pandemic since October 2021, with the help of Savanta. We have run surveys every 6 months since, with the latest one in May 2024.

A response to the pandemic

The first time we ran the tracker, we were amid a global pandemic. There was no reliable, up-to-date data on how people across the UK were faring in the face of this massive shock. For us to hold the Government to account we needed to be able to show evidence of what we all knew to be the case: the pandemic was likely to be disproportionately affecting people in low-income households.

So, like many other organisations, we scrambled to run ad-hoc surveys in the early months to capture the effects of the pandemic on households’ financial situations. Those early surveys, by necessity, focussed on only part of the picture, for example, private renters.

Once we took a pause to assess our next best step, we realised that we needed a wider focus. This was both for efficiency and to give us a wider overview of what households were dealing with here and now.

So, building on those early ad-hoc surveys, we ran our first cost of living tracker in Sep-Oct 2021. It showed that low-income households were indeed baring the financial brunt of the pandemic:

“We find that 3.8 million low-income households across the UK are in arrears, and 4.4 million have had to take on new or increased borrowing through the pandemic. Many of these households weren’t in arrears before the pandemic and have faced income loss and increases in their expenses.”

We also gathered crucial evidence that people were being dragged down by debt. We were able to show that the support Government put forth to protect incomes and jobs would not be enough to prevent an overhang of debt that many would struggle to repay. Sadly, this is exactly what happened. One million more households were in arrears with at least one bill or credit commitment in October 2023 (4.8 million) than in October 2021 (3.8 million). We felt that the evidence the first Tracker uncovered was so valuable it was worth us investing in it further. So we ran the survey again, with some changes to better capture things like households going without essentials, in May 2022.

The tracker evolved

In June 2022 we established the Insight Infrastructure programme of work. It exists to democratise access to and use of data, to improve and link up existing data, unlock new data sources and to enable others to make data driven decisions.

The Cost of Living tracker became part of this programme of work and has run 4 more times in October 2022, May 2023, October 2023 and May 2024.

We decided to focus on low-income households only because we knew that their experience of both the pandemic and the cost of living crisis was different to those on higher incomes. They were more likely to have depleted any savings, lost income, faced higher costs relative to their incomes, and faced further barriers like access to credit.

Doing a bespoke survey of low-income households also meant that we could ensure that we best captured the experiences of households on low-incomes, and that our sample sizes of demographics like ethnicity and benefit recipients would be reflective of those on lower incomes. Where possible, we have aligned our questions to be like larger government surveys, such as the Family Resources Survey, so that we can then compare our findings to similar cohorts as well as the full population.

How we’ve used insights

The tracker has allowed us to fill the gap created by the absence of large-scale government surveys providing timely data on the experience of low-income households’ financial positions during these challenging years. This has been reflected in our conversations with government, the media using our findings in their reporting on the crisis, and working with other organisations like regulators and the Bank of England to ensure that they are aware of how low-income consumers are faring.

Cost of living dashboard

Now, we bring you the cost of living dashboard where you can explore some of the data we have gathered in an interactive way. 

It shows:

• the types of essentials people reported going without 
• the types of bills people reported being in arrears with.

As well as seeing the headline finding on the front page of the tracker, you can dig further into the data. You can explore the timeseries as well as explore the data by:

• ethnicity
• age
• tenure
• income quintile.

The dashboard also has brief methodological details and a glossary of terms used.

We have included only some of the data from the Trackers in this first version of the dashboard because we want to start small, gather feedback and improve future iterations.

Diving into dashboard insights

People will be interested in different things from the dashboard. We provide a couple of examples here but would love to hear about what you find most insightful and useful in your work.

For example, under the ‘Age’ tab you can see that households with adults aged 44 and under are most likely to report that at least one household member has gone without at least 1 essential in the 6 months prior to the survey.

Within the ‘Tenure’ tab you can see that low-income households with housing costs, especially those renting privately or in the social sector, were most likely to be in arrears with at least 1 household bill or credit commitment.

What information is available?

• Location:

1. Government Office Region (regions of England, and country-level data for Wales, Scotland, Northern Ireland)
2. Rural/intermediate/urban

• Household composition: number and ages of children, and respondent (0-13, 14-17, 18+)
• Work status (respondent and other adults in household, if applicable)
• Caring responsibilities (new for May 2024)
• No Recourse to Public Funds status of household members (new for May 2024)
• Types and amounts of income/earnings received
• Types of benefits received, including whether the household has deductions from their benefits or not
• Housing tenure: owning outright, owning with mortgage, private renter, social renter (split by council and housing association), shared ownership
• Ethnicity
• Disability/long term health condition
• Net equivalised household income (before housing costs)
• Savings held

Defining low-income households

Our definition of low-income households for this tracker is households in the bottom 40% of incomes across the UK, using a Before Housing Costs (BHC) equivalised net household income. This income definition includes earnings and benefits, as well as other income sources. We adjust the maximum annual income that a household can have to meet this definition according to the latest income data available to us from HBAI. It has ranged from around £24,800 (Oct 2021) to £28,200 (May 2024).