Report

Cost cutters

This report from UK think tank the Fabian Society sets out how the UK can address the poverty premium and make markets work for low-income families.

The recent cost-of-living crisis and fall in living standards has been unprecedented in living memory. And while the rate of inflation may have fallen, families are still struggling to pick up the pieces from the past two years as prices continue to tick upwards.

Global economic shocks, such as the Russian invasion of Ukraine, are the main cause of rapidly rising prices around the world – including in the UK. But people are also paying higher prices here because of unfair industry practices, or to compensate for market problems they did not cause.

The ‘poverty premium’ is perhaps the most egregious example: millions are forced to pay higher prices, and sometimes go without as a result, because they have a low income.

This report sets out how the UK can address the poverty premium and make markets work for low-income families. It sets out the scale of the poverty premium before looking at the reasons why markets, regulators and the government fail families. We identify a number of recommendations to help people to keep more of their money in their pockets and rebuild financial security for all consumers.