© Andy Hall for the Observer‘While the wealthiest have the comfort of a bigger safety net than ever, others get payday loans, credit cards and rent arrears.’
As the cocktail of long-term austerity, rising living costs and a slumping post-Brexit economy hits, what's really frightening is the crisis that is brewing but is barely being noticed.
Look at this week's finding that one in four families now have less than £95 in savings. That's staggering, not simply because it gives an insight into how large swaths of families in Britain are clinging on financially in a climate of low wages, cut benefits and high rents, but also because it offers us a warning of how little it will take to push them over the edge.
There are now 19 million people in this country living below the minimum income standard (an income required for what the wider public view as "socially acceptable" living standards), according to figures released by the Joseph Rowntree Foundation (JRF) this month. Around 8 million of them could be classed as Theresa May's "just about managing" families: those who can, say, afford to put food on the table and clothe their children but are plagued by financial insecurity. The other 11 million live far below the minimum income standard and are, the JRF warns, "at high risk of falling into severe poverty".
We are entering a period not simply of growing hardship in this country but of what I would call precarious poverty: the sort that isn't characterised by the traditional image of lifelong, deep-seated deprivation, but which can hit in a matter of days: a broken washing machine, a late child tax credit payment, an injury that leads to time off work.
In an economic climate that is normalising low-income families having to live hand to mouth, increasingly, for a whole economic class, one small unexpected cost can trigger a spiral into debt.
The same report that found that one in four UK families can't afford even £100 in savings discovered that, in contrast, the average high-income family now has a cushion of £62,885 - a gulf that has grown by 25% in just a year. While the wealthiest have the comfort of a bigger safety net than ever, others get payday loans, credit cards and rent arrears.
Melissa, a 20-year-old student, has watched her family struggle to pay the bills since she was at primary school. Ten years ago her mum, Elizabeth, slipped a disc, so badly that sometimes she can't get out of bed. And, just like that, she had to give up her job as a cafe manager.
A few years later, Elizabeth developed a heart problem: her heart would stop for seven seconds, causing her to faint. "She'd often hit her head," Melissa explains. For long periods, there was no wage at all coming in: Melissa's stepdad had a heart attack during her GCSEs, and her father had a brain injury.
From the age of 10, Melissa has helped care for her parents: cooking, shopping, cleaning, even helping with complex benefit forms and on top of that they've got their bills to pay - the car tax, water, the TV licence. It used to be school uniforms that were too expensive to buy. Lately it's been food. "Mum tries to shield me and my sister from the debt," Melissa says. "I know they've been to a food bank a couple of times."
This winter the debt became too much: Elizabeth's housing benefit was stopped in November (the council suspended it when Melissa used the family address for her student loan) - and, with no savings to fall back on, by January their landlord had evicted the family. Elizabeth moved into a one-bed flat this month, the rent borrowed from her mother. And, while Elizabeth makes a new claim for housing benefit, Melissa has no bed to sleep in when she comes home from university to care for her.
Elizabeth has developed depression and anxiety over the years, but Melissa tells me the strain is affecting them all. "We need a chance to get back on track," she says, "not worrying about someone turning up at the door for money".
On Friday the backbencher Kelly Tolhurst, Conservative MP for Rochester and Strood, is due to propose the Children's Society's "breathing space" campaign to parliament: a change in the law that would give families like Melissa's a 12-month break from mounting interest and visits from bailiffs as they get on top of their debts. The government would do well to listen and to start to think about the bigger picture.
The average UK household now owes a record £12,887, even before mortgages are taken into account, according to the TUC. Around 1.6m households are in what is termed extreme debt: that means paying out 40% or more of their entire income to creditors.
This is not a problem that's going away, as wages stagnate, benefits are cut and prices rise. This is a sign of what's to come. As we enter a five-year squeeze on living standards that's set to be worse than the aftermath of the global crash, there is a real risk that millions of families will not be able to keep their heads above water. Precarious poverty will soon be hard to ignore.
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