Four years into Britain’s cost-of-living crisis, the reality facing the working class is getting worse, not better. New figures from the Joseph Rowntree Foundation (JRF) show that 62 percent of low-income families couldn’t afford at least one essential item during the past six months. That’s a record high, equivalent to 7.4 million households, up from 7.1 million just a year ago.
For millions, this isn’t about cutting back on luxuries. It’s about deciding whether to eat, stay warm or replace worn-out clothes. Nearly half of those surveyed said they’d skipped meals or reduced portion sizes to make ends meet.
This is exactly how capitalism functions during periods of crisis. Inflation doesn’t hit everyone equally. Lower paid workers spend a far greater share of their income on necessities like food, rent and energy, so rising prices eat away at their standard of living far faster than they do for the wealthy. Meanwhile, capital protects itself by passing rising costs onto consumers wherever possible while continuing to extract profit.
The JRF notes that food inflation averaged 4.1 percent between May 2025 and May 2026, above the overall inflation rate of 3.6 percent. That difference falls hardest on working-class households because food isn’t optional. When wages and benefits fail to keep pace, workers often can’t simply consume less. They go hungry instead.
Andy Burnham has entered office promising to “give people some breathing space, help with the cost of living”, including reducing VAT on electricity bills from October. The planned cut is expected to save households around £45 a year.
Any reduction in household costs is welcome for workers struggling to survive. But a £45 annual saving barely scratches the surface when millions can’t consistently afford food, heating and clothing. It leaves untouched the economic system producing these conditions in the first place.
As Caroline Abrahams, Charity Director at Age UK, put it: “Any extra help with their energy bills will be welcomed by older people, who we know worry hugely about the cost of fuel and often ration their heating, putting their health at risk, to ensure they can make ends meet.”
Age UK is now calling for the Warm Home Discount to be expanded to cover all low-income households.
Research from Christians Against Poverty paints an equally bleak picture. Around 35% of adults in Britain worry about their finances every day.
Juliette Flach, Acting Head of Policy and Public Affairs, said the small VAT cut won’t resolve the underlying crisis:
“With incomes failing to keep pace with the high cost of essentials, many of the people we see are left facing impossible decisions.”
Those “impossible decisions” aren’t accidents or policy mistakes. Under capitalism, wages aren’t determined by what workers need to live with dignity but by what employers can get away with paying. Every pound not paid in wages is a pound available for investment or shareholder dividends. The constant pressure to reduce labour costs is built into the system itself through competition and capital accumulation.
The government points to rising real household incomes, falling food bank use and lower food insecurity as evidence that its policies are working. It also highlights increases to the National Minimum Wage, the removal of the two-child limit, above-inflation rises to Universal Credit and a £1 billion Crisis and Resilience Fund.
The JRF also notes that around half a million fewer poorer households are unable to keep their homes warm than two years ago, following measures including reductions in average household energy bills and support through schemes like the Warm Home Discount.
These improvements matter. Every worker who can afford to heat their home or feed their family is better off than before. We should recognise genuine gains won through political struggle, but also recognise their limits.
Even after these measures, nearly two-thirds of low-income families still can’t reliably afford the essentials. That’s because poverty isn’t an unfortunate side effect of capitalism. It’s one of the conditions that allows capital to reproduce itself. Capital depends on a working class compelled to sell its labour power to survive, while maintaining a reserve army of labour that disciplines wages across the economy by competing for jobs. Welfare measures can soften the sharpest edges of exploitation, but they don’t abolish the social relations that continually recreate insecurity.
Britain’s crisis also can’t be separated from imperialism. For decades, British capitalism cushioned sections of its domestic working class through superprofits extracted internationally, by the brutal exploitation of people in other nations. As global competition intensifies, profit rates come under pressure and economic growth slows, the ruling class increasingly seeks to restore profitability by shifting more of the burden onto workers at home through stagnant wages, cuts to public services and higher living costs.
The result is a society where millions of workers produce enormous wealth yet still skip meals, ration heating and live with constant financial anxiety. Charities, food banks and targeted government support may keep people alive, but they don’t solve the contradiction at the heart of capitalism: production is social, while the wealth workers create remains privately appropriated.
Until the working class takes control of production itself, every improvement will remain partial and reversible. As long as profit comes before human need, millions will continue to find that even the essentials of life are treated as commodities to be bought, rather than rights to be guaranteed.
