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Employers have key role in supporting low-income families this winter

With the Universal Credit (UC) cut looming next month and energy and living costs surging, low-income families need employer backing.

Analysis from the Joseph Rowntree Foundation (JRF) estimates that a family with two children and one adult working full-time could end up needing to find an extra £31/week from October.

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Earlier this year government temporarily increased it's UC payments by £20 per week, which was dubbed a 'lifeline' for working parents under added financial pressures of the pandemic.

After this uplift is removed, the extra £20/week families have been relying on will be compounded by having to find an additional £3/week for energy increases (assuming a meter) and £8 for other living costs.

From April 2022, the Health and Social Care Levy would also bump the same family’s National Insurance Contributions up by £2.50/week.

Manny Hothi, chief executive of anti-poverty and inequality charity, Trust for London, told HR magazine: “We know that work is the single most important route out of poverty, but more and more people in the capital are working and still not getting by.

“Employers play a crucial role in tackling the problem, and there are meaningful, practical steps they can take right now."

Committing to paying a real living wage is one of the ways employers can start to improve workplace inequalities. 

"Paying fair wages that reflect what people need to make ends meet makes sense for businesses and the economy," he said.

"Research shows it leads to better staff retention, improved workplace relationships and increased business reputation. Investors are also increasingly paying attention to how companies treat workers."

Workers on zero-hours contracts had been hit especially hard by the pandemic Hothi added. Without safety nets or protection from poor employment practices, they were vulnerable to businesses cost cutting.

He said workers must be viewed by employers as valued assets rather than overhead costs and must be given a voice in the business.

“Offering truly flexible working practices is another impactful way to reduce in work poverty and maximise talent. Single parents and carers often take jobs below their skill level in exchange for flexibility, and are trapped in rigid contacts that prevent them working overtime."

Hothi urged employers to take an honest look at the diversity of their workforce, and how their HR practices could be made more inclusive, citing higher rates of unemployed young black men compared with their white counterparts with the same or similar education levels.

“Millions of low-income families are incredibly anxious about how on earth they are supposed to make ends meet from next month,” said Joseph Rowntree Foundation deputy director of evidence and impact, Peter Matejic.

“Ministers rightly recognise this is shaping up to be a very difficult winter, yet there is little sign of them taking the decisive steps that are necessary to avoid real hardship for low-income families.

“The growing concern about the cost of living reinforces why cutting Universal Credit makes absolutely no sense. Social security is a key defence in protecting families from precisely these sorts of economic shocks, but the government is on course to impose the biggest ever overnight cut to the system and leave families with an inadequate lifeline."

Matejic stressed: “The prime minister urgently needs to keep the £20-a-week increase to Universal Credit in place. Rising child poverty, soaring demand for food banks, people worrying about keeping their homes and covering the cost of bills, flies in the face of uniting and levelling up our country.”