LOW INCOME CONSUMERS PAY A POVERTY PREMIUM EQUIVALENT TO THREE MONTHS’ WORTH OF FOOD
Fair By Design’s study of 1,000 low income households [1] accessing the services of national poverty charity Turn2us, found that low income households were spending the equivalent of 14 weeks’ of food shopping [2] just to access the same services as those who were better off.
People struggling with money were paying an extra £478 a year for essentials like energy, credit and insurance because of the poverty premium:
- Car insurance was the biggest contributor to the poverty premium, with some people paying nearly £300 more a year because of living in a deprived area. Additional charges for paying monthly instead of annually could mean an extra £160, for a total poverty premium of nearly £500.
- Credit was expensive when on a low income, whatever form it took. A sub-prime credit card cost around £200 more a year (between £194-£207) and personal loans cost more than £500 extra.
- Being on the best energy prepayment tariff was still be £131 more expensive than the best online-only one. But being on a fixed tariff could still be costly: not paying by direct debit cost up to £143 more a year.
