Social tariffs and the cost of living: Assessing the case for social tariffs as a mechanism to ensure access to essentials

We conducted two online focus group sessions with low-income individuals and analysed nationally representative poll of 4,000, to understand households’ experiences with affording essentials amidst the cost-of-living crisis.

KEY FINDINGS

• The ‘Martin Lewis effect’ – using consumer information to get better deals – has its limits.
  • Some 80% of people reported shopping around for food and groceries but around 1 in 6 of those found it difficult.
  • Those on lower incomes were more likely to say that they almost never found better prices when shopping around.
  • Some focus group participants felt that shopping around was ineffective as businesses were not passing on wholesale cost reductions to consumers.
• Over half of respondents say they spend more than half of their household income (after housing costs) on essentials, and 29% of those ‘struggling financially’ reported spending over 80% on essentials.
• The public are supportive of the idea of social tariffs – 59% are in favour of giving discounted rates for essential goods and services to certain households across all demographic groups, with 12% against.
• However, problems preventing the existing offering of social tariffs living up to their potential include:
  • Awareness: a third of universal credit recipients had not heard of social tariffs for broadband, and around a fifth believed that they were not eligible.
  • Accessibility: two-fifths of those who did not claim a social tariff despite being eligible stated that they did not know how to claim it.
  • Level of support: 52% of people did not believe there is enough support to help struggling households afford essentials.
• The final stage of this project – commissioned by Citizens Advice – will build on this analysis to design a coherent policy framework to help households to afford their essentials during the crisis and beyond.