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This text is the most recent a part of the FT’s Monetary Literacy and Inclusion Marketing campaign
The variety of UK households in search of assist with cost-of-living points is heading for a report going into winter because the voluntary sector warned that it could battle to manage as it’s squeezed by rising prices and dwindling donations.
Knowledge collected by Residents Recommendation, the charity that provides impartial counselling to these struggling to pay their payments, exhibits demand for consultations effectively forward of final 12 months because the poorest households battle with rising housing prices and the elimination of state assist for power payments.
The variety of folks requesting assist from Residents Recommendation for cost-of-living points final month was a fifth increased than in October 2022 and greater than 40 per cent increased than a decade in the past when data first started, in accordance with its newest figures.
Sarah Vibert, chief govt of the Nationwide Council for Voluntary Organisations (NCVO), the biggest membership physique for charities in England, warned that this winter was shaping as much as be the “hardest but” for charities, which have develop into an more and more necessary a part of the social security internet in recent times.
Nearly a 3rd of the earnings of the voluntary sector comes from contracts delivering authorities companies, which had been being hit by inflation and persevering with excessive power prices, she mentioned, whereas donations had been dwindling.
She urged chancellor Jeremy Hunt to make use of the Autumn Assertion to intervene and increase the worth of the contracts to stop voluntary organisations from going below.
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“The worth of those contracts isn’t rising consistent with inflation and we’re calling on the chancellor to appropriate this within the Autumn Assertion by making certain these contracts are uplifted to fulfill the true value of supply. If this goes unheard, many charities might stop to exist,” she mentioned.
Morgan Wild, the top of coverage for Residents Recommendation, mentioned that quickly rising housing prices had been the largest driver of demand for requests for assist on the charity’s UK community of three,300 recommendation bureaus.
The ending of the common £400 grant to assist households with power payments in March, mixed with the freezing of housing profit charges since 2020, was leaving extra folks unable to make ends meet.
Housing profit funds lined the total value of simply 5 per cent of latest non-public leases within the first quarter of 2023, in contrast with one in 4 in April 2020, in accordance with the Institute for Fiscal Research.
Half of the individuals who attain out to Residents Recommendation for debt counselling, together with rising numbers of mortgage holders, are in so-called “adverse funds” the place essential spending exceeds their earnings, up from 37 per cent earlier than the pandemic, Wild added.
“Vitality costs have come right down to some extent, however are nonetheless increased than three years in the past, however the true shift is in housing-related demand. We’re seeing report numbers of evictions and report numbers of individuals in search of recommendation on housing points,” he mentioned.
Nicole Sykes, the top of coverage at Professional Bono Economics, a consultancy for the charity sector, mentioned that real-term incomes for the charitable sector had been projected to fall by £800mn this 12 months, based mostly on evaluation of forecasts from the Workplace for Finances Duty.
“We now have a inhabitants and a sector that are each receiving a lot much less assist from the federal government than final winter, however a 12 months of excessive costs and virtually 4 years of ever-increasing demand have taken a toll,” she added.