For most of last year, price rises outpaced wages, especially in sectors such as retail and hospitality which employ many low-income workers. The financial pressure is even worse for low-income families receiving working-age benefits and tax credits, frozen since April 2016, and they are paying more in five key areas:

1 Paying more for public transport

Train price rises have received a great deal of media attention, but bus and coach transport are often more important for low-income households, especially outside London and the South East. The cost of bus and coach travel has increased by a huge 13.9% in the last year. Low-income households that regularly use buses will pay an average additional £116.15 per year for their fares in 2018. Transport costs or availability can have knock-on effects if they restrict people’s ability to reach better-value shops, jobs or services. Keeping bus travel affordable is vital to enable people on low incomes to buy low-price food, get and keep jobs and access health and other services.

2 Paying more for food and energy

In addition the cost of some essential goods and services has been rising even faster than average inflation. Energy bills have increased by 6.4% since last year, with electricity alone increasing by a massive 11.4%. Typical households in the bottom fifth of incomes will now be paying £61.86 more compared to last year for the same energy use. Food prices have also been rising faster than average, at 4.3% over the past year. It will cost an additional £67.81 per year for a family in the poorest fifth for the same weekly shop in 2018.

These price rises hit poorer households especially hard. Households in the bottom fifth of income spend twice as much of their income on food and fuel compared with households in the top fifth. Just to cover those food and energy basics, families will need to find an extra £130 this year.