Briefing: Complex disabilities and the cost of living

No one should struggle to afford essentials like food, heating or transport.  In this briefing, we set out the findings from our October 2022 analysis of the cost of living and complex disabilities, produced in partnership with the National Centre for Social Research (NatCen). 

On this page:

• Introduction
• Defining complex disabilities
  • About the study
• Key findings
  • Debt, hardship and food insecurity
  • Financial resilience
  • Families and children
• Why the action the government has taken so far will not be enough
• Three solutions to help people with complex disabilities and their families stay afloat 
  • A benefits system that meets disabled people’s needs
  • Additional financial support to cope with higher energy costs
  • Targeted support for disabled people and their families

Introduction

In the first study of its kind, we found that even before the current cost of living crisis, people with complex disabilities were struggling to make ends meet, with:

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  Almost a quarter (24%) of people with complex disabilities unable to keep their home adequately warm.

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  Seven in ten (69%) people with complex disabilities having less than £1,500 in savings to rely on.

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  Only 13% of people with complex disabilities in full-time work, with nearly a third (29%) drawing on support from Universal Credit.

In recent weeks, the UK government has taken action in response to spiralling energy bills through the new Energy Price Guarantee. However, for the thousands of people with complex disabilities who were already facing the prospect of going without heating this winter, this support simply won’t be enough to allow them to make ends meet. 

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Defining complex disabilities

For the purposes of this research, someone has complex disabilities if they have two or more of the following conditions and they report that their life is impacted by their disabilities:

• Sight loss
• Hearing loss
• Autism
• Learning disability

These needs may be with a person from birth, or following illness or injury, or they may develop with age. We know that people with complex disabilities face additional costs and expenses. These include the need to buy specialist equipment as well as extra energy costs to use and maintain this equipment. 

As well as facing extra costs compared to non-disabled people, people with complex disabilities are more likely to rely on a low income. A major driver of this is the barriers that people with complex disabilities face to entering employment and to progression within the workplace.

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Key findings

Debt, hardship and food insecurity

We found that even before the current cost of living crisis, disabled people were struggling to make ends meet. 

For those of working age:

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  Almost a quarter of people with complex disabilities (24%) were unable to keep their home adequately warm, compared to 8% of those with a different disability, and 3% of those with no disability.

• 

  People with complex disabilities were also less likely to be able to keep their home in a decent state of decoration or repair (34%) than those with another disability (21%) or those with no disability (10%).

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  Disabled people generally were three times more likely (13%) to be behind on bills or debts than those with no disability (4%).

• 

  Disabled people were also three times more likely to be food insecure (17%) than those with no disability (5%).

Financial resilience

Disabled people were less likely to be in employment, and more likely to be earning a low income when compared to non-disabled people, leaving them with little room to manoeuvre in the face of spiralling energy costs. People with complex disabilities were disproportionately likely to have very few savings to rely upon. 

For those of working age:

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  Almost seven in ten (69%)  people with complex disabilities had less than £1,500 in savings. That compares to (53%) of people with another disability and 33% of those with no disability.

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  People with complex disabilities were significantly more likely to be unemployed (82%) compared with those with another type of disability (53%) and non-disabled people (23%). They were also less likely to be employed full-time (13%) than those with a different type of disability (31%) and those with no disability (58%).

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  Disabled people generally were more likely to be earning less than £600 per week (46%) than non-disabled people (25%).

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  People with complex disabilities were more likely to be in receipt of certain benefits than people with another disability and non-disabled people. That includes both income-related benefits like Universal Credit, and disability benefits like Personal Independence Payments (PIP).

	Universal Credit (UC)	Employment and Support Allowance (ESA)	Personal Independence Payment (PIP)
People with complex disabilities	29%	27%	51%
People with another disability	15%	15%	21%
Non-disabled people	5%	0%	0%

Families and children

Our research also looked at differences in the financial experiences of households that include disabled children and households that only include non-disabled children. It found that families with disabled children were disproportionately likely to have fewer savings, to be struggling financially and to be food insecure.

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  Adults in households with disabled children were more likely to have savings of less than £1,500 (60%) than those in households with children with no disability (42%).

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  A smaller proportion of adults in households with disabled children worked full time (37%) than those in households with children with no disability (49%).

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  Adults in households with disabled children were more likely to be unable to replace a cooker or large electrical goods (38%) than those in households with children with no disability (21%).

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  Adults in households with disabled children were more likely to be food insecure (13%) than those in households with children with no disability (8%).

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Why the action the government has taken so far will not be enough

Our findings are based on an analysis of data collected in 2021. Since then the price of energy has increased substantially in the UK and around the world. 

In February 2022, Ofgem announced that from April the energy price cap – the maximum amount that energy providers can charge consumers – would rise to £1,971 a year. This represented a historic increase of 54%. In late August it announced a further raise due to take effect from October. This would have increased the cap by 80% to £3,549 a year, with further increases expected through 2023.

In response to the growing cost of living crisis, the UK government announced a series of measures across February, May and September of 2022. The most significant was the introduction of the Energy Price Guarantee – a subsidy that will keep the annual cost of energy for a household with average levels of consumption at £2,500 for the two years from October 2022. 

Alongside this guarantee, the government has announced:

• A £400 discount to energy bills for winter 2022-23.
• A £150 council tax rebate for people living in houses in bands A-D in England. 
• Payments totalling £650 for people receiving income-related benefits.
• A £150 one-off payment for people receiving disability benefits.
• A £300 one-off payment for people who qualify for a Winter Fuel Payment.

The Energy Price Guarantee in particular represents a significant and welcome investment in supporting people to keep up with spiralling energy bills. But these policies will not by themselves be enough to prevent thousands of disabled people from being swept into poverty and destitution over the coming winter and beyond. 

Even with both the price guarantee and discounts to energy bills, typical households are still facing a 64% increase to their energy bills from last winter, according to analysis from Money Saving Expert. Disabled people who were already living in poverty are likely to be the hardest hit unless the government takes action. 

At the time of writing, the government has yet to commit to uprating benefits in line with inflation in the spring of 2023. As a result of successive benefits freezes, the standard rate of Universal Credit has increased by 7.5% since 2013. In the same time period inflation has increased by 22.9%.

Our research has found that many people with complex disabilities simply do not have the means to meet these costs. 

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Three solutions to help people with complex disabilities and their families stay afloat

1. A benefits system that meets disabled people’s needs

People with complex disabilities face barriers to employment and are disproportionately likely to be living in poverty. Our research found that only 13% of people with complex disabilities are in full-time work, with nearly a third (29%) receiving Universal Credit. 

Making sure that benefit payments are sufficient to meet the costs of living is one of the most effective ways to protect people with complex disabilities and their families through this crisis. 

Increase benefits to address the impact of inflation

After a significant period of benefits freezes between 2012 and 2020, most benefit rates are increased or ‘uprated’ annually each April to take inflation into account. However, there is a significant gap between the point at which benefit rates are set and the point at which people receive the new amount. 

In the spring of this year, benefits increased by 3.1%, tracking the Consumer Price Index (CPI) measure of inflation from September 2021. By the time these changes came into effect in April 2022, CPI inflation was already at 9%. Had benefits increased in line with actual inflation at the time, the standard rate of Universal Credit would be approximately £240 a year higher than the current rate. (For further analysis of issues with the uprating system see the Work and Pensions Committee’s cost of living report.)

The government has responded by providing one-off payments totaling £650 for people receiving income-related benefits, and £150 for people receiving disability benefits. However, with average households still facing a 64% increase in their energy bills compared to last year, these payments will not cover the shortfall that people will experience during this winter alone. 

Even before this crisis, there was growing evidence that benefit rates are insufficient to meet people’s basic needs, with increasing numbers of disabled people facing destitution and food insecurity.

Strengthen local welfare support

Many people with complex disabilities are not able to access help from benefits delivered by the Department for Work and Pensions. Well-known problems with health and disability assessments mean that too many people need to spend months going through lengthy and distressing appeals before they become entitled to Personal Independence Payments or additional financial support from Universal Credit.

Local welfare assistance schemes should not function as a replacement for an accessible benefits system with rates sufficient to cover disabled people’s living costs. However, as growing numbers of people enter into financial crisis, local authorities should be supported to do everything they can to help disabled people and their families stay afloat.

The Household Support Fund was developed to fund local authorities to respond to the financial impact of the Covid-19 pandemic. It has been periodically extended since 2020. However, research from End Furniture Poverty found that as of early 2022,  one in five local authorities do not operate a local welfare assistance scheme, with additional funding often spent on other forms of crisis support including food banks. Overall investment in local welfare schemes has significantly reduced over the past ten years, with remaining schemes often putting up very high barriers to access.

2. Additional financial support to cope with higher energy costs 

People with complex disabilities and other disabled people have been left particularly exposed to this crisis because they often unavoidably face higher energy costs than other consumers. These can include costs related to maintaining and charging specialist devices, as well as increased heating costs for people who face barriers to making journeys and leaving their homes. 

Our research found that almost a quarter of people with complex disabilities (24%) could not keep their homes adequately warm. Most simply do not have a way to respond to higher energy costs this winter, with seven in ten (69%) having less than £1,500 in savings.

Introduce a social tariff into the energy market

Introducing a social tariff for energy costs would mean discounting the cost of energy use for specific groups. That includes households receiving a low income and groups, like disabled people, who face specific barriers to affording energy bills.  

In their 2022 report, Solving the Costs of Living Crisis’ Fair By Design and National Energy Action set out the case for a new social tariff in the energy market, arguing that a new social tariff should:

• Be additional to the Warm Home Discount and the energy price cap.
• Be mandated across all suppliers.
• Be targeted at those most in need.
• Reduce costs for consumers (i.e. be set below the current cap/guarantee).
• Auto-enrol eligible consumers.

Our research has shown that the current cost of living crisis is compounding an already precarious financial situation for thousands of people with complex disabilities and their families.

Reinstate the Warm Home Discount for disabled people

The Warm Home Discount provides a £140 payment each year to help households in vulnerable circumstances meet the cost of their energy bills. However, in August 2022 the government announced changes that would remove eligibility for anyone in receipt of disability benefits who does not also claim an income-replacement benefit. 

These changes, due to come into force in November 2022, will remove entitlement to the discount from nearly 200,000 disabled people, effectively cancelling out the £150 disability cost of living payment introduced in response to the crisis. 

3. Targeted support for disabled children and their families

Even before the current cost of living crisis, disabled children and their families were facing financial pressures. 

Our research found that 60% of adults in households with disabled children had savings of less than £1,500  and more than one in ten (13%) were food insecure. With social care services cut, many families already struggle to get the support they need and feel there’s no way out of their financial situation.