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How does the increase in the cost-of-living effect Charities?

Struggling to make ends meet when it comes to the everyday cost of living is nothing new for vast swathes of the UK population. But, as the price of simply heating your home, filling up the car and paying for the weekly food shop have soared beyond comprehension, record numbers are now sharing in the experience – while those who were already battling are being pushed further into financial hardship, and even poverty.

On 17 March, the Bank of England's Monetary Policy Committee said that inflation would rise to “around 8% in 2022 Q2, and perhaps even higher later this year” and with average pay increases not keeping up with inflation with figures showing wages rose by 3.8% between November and January. Those who receive working age benefits or state pensions see their incomes uprated each year. but the increase in April was only 3.1%.

The rise in prices in the UK is the highest it has been for 30 years with warnings that inflation might reach 10% within months, as the price of fuel and food puts pressure on household budgets with one food industry boss warning that food prices could rise by up to 15% this year. Household fuel bills have also soared with about 18 million households on standard tariffs saw their annual bill jump from £1,277 to £1,971 on 1 April. Bills are set to rise further in October when Ofgem’s next price cap level takes effect – forecasts are as high as £3,500 a year.

With just about every household bill climbing, lending on credit cards is rising too. Among adults surveyed in the latest ONS cost of living report, 17% reported borrowing more money or using more credit than they did a year ago.

Peter Stutton, head of policy at debt charity StepChange said: “We’re convinced that as the year goes on the Chancellor is likely to need to find a way to provide more targeted support for those who are simply unable to absorb the cost of living increases into their budgets.”

So what does this mean to Charities?

Well the charity sector are not immune to this crisis as it is hitting most charities, not-for-profits and community groups hard.

As the UK struggle with their living costs there is little money for supporting charities and this is often one of the first costs which is reduced when other costs rise. This then results in charities being able to offer less to the community they serve, when this community need help more than ever.

As well as a reduction in donations made to charities, these charities are also facing an increase in their operating costs, with increases to staffing costs, energy prices and the increased cost of goods and services.

Charities will see the value of grant income and donations decline, with Pro Bono Economics calculating that on current forecasts of inflation, a £20 donation in 2021 will be worth £17.60 in 2024, while a £100,000 grant will be worth £88,100 by 2024. For charities whose business model relies on selling services, such as the museum or leisure sectors, one would also expect to see a reduction in their income as people’s disposable income declines. (Source: NPC)

As a charity we know the difficulties charities and the community they serve are facing. We are facing a drop in the amount of funds which come into our charity and the knock on effect this has on the good causes we support. One way we are proud to be supporting our community is by offering free donations. These free donations are raised when supporters shop online via us and are paid for by the retailers to say thank you for shopping with them. So when a supporter shops via us their cause receives a free donation. Although we understand that people are shopping less there are still essentials which need to be purchased and free donations can be raised on everything from the weekly food shop to car insurance to household goods and utilities plus many in between.

Ways to help reduce your costs:

If you have credit card debt, transfer it to a 0% balance transfer deal (bear in mind that most charge a fee). If this is not possible, perhaps due to your credit score or an insufficient new credit limit, always try to pay more than the minimum payment required by the provider. 

When you are satisfied that your regular outgoings are as lean as they can be, check to see if there are any income-related benefits or grants you could be missing out on. With a few key details from you and your partner, this is easy to do with a government-approved benefits and grants calculator such as

If you are working and have a child aged between three and four, make sure you are collecting the Government’s 30 hours free childcare if you are eligible. 

Using your bank’s app, if you aren’t already, makes organising your finances a lot easier and means you can keep track of your spending whilst on the move.

If you haven’t already, download your supermarket’s free loyalty app. As you’re very likely to have your phone with you, this makes it easy to scan and collect any points you’re entitled to. These can then be redeemed for a pounds-and-pence discount off the cost of your grocery shop.

Small changes to ingrained daily behaviours can also pay dividends over time. For example, making a commitment to use less energy. This could simply mean hanging out washing as the weather improves rather than using the tumble drier, turning the heating down by a degree or two, or switching off lights or radiators in rooms that you don’t use.

Outside of the home, changes such as seeking out free parking, and swapping a bought lunch and coffee for one you’ve pre-packed.

Who can you contact for help?

If you are falling behind with household bills, the first step is to contact the company in question and explain your situation. It may agree to reduce your payments for an agreed period of time, and/or set up a payment plan. 

Energy companies are obliged by Ofgem, for example, to offer an affordable payment plan, as well as provide emergency credit to prepayment customers who can’t afford to top up.

It’s the same with any repayments on mortgage, credit cards or loans. Contact the provider to discuss your options.

Beware of scammers!

The growing demand for credit products, such as loans and credit cards, resulting from the cost-of-living crisis has presented particularly fertile ground for fraudsters. According to the 2021 Fraudscape Report published by fraud prevention firm Cifas, there were 360,000 fraud cases recorded on the National Fraud Database last year.

Identity fraud (such as taking out credit under someone else’s name) accounted for around two-thirds (63%) of this figure and grew by 22% during the course of 2021.

The vast majority (91%) of fraud reported last year was carried out online, with people aged over 61 disproportionately affected accounting for 24% of cases.

If you are getting into debt

If you are worried about getting into debt, the following charities offer free, impartial advice. Never pay for advice around debt and never share details with companies contacting you by email or phone. Sadly, even debt advice is a target for scammers.

National Debt Line

Turn2Us (also offers benefits and grant eligibility calculators)


Citizens Advice

Christians Against Poverty

Source References:
Institute for Government


About the author

Luisa Gatward

Our Head of Operations, Luisa is responsible for the smooth running of all operations including marketing and partner relationships. Having started working for TheGivingMachine in 2010, she has seen our Charity grow and develop into what we have today.

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