Families in financial crisis: Insights from our Crisis Fund

Scott Compton - Senior Policy Advisor
Tuesday 17 May 2022
Girl in outside looking straight ahead at camera

As the cost-of-living crisis deepens, Action for Children takes a look at the impact of its Crisis Fund since the £20-a-week cut to Universal Credit

The Action for Children Crisis Fund provides emergency grants to children, young people and families in our services. By providing the funds for food, utility bills and other essentials, it offers families a lifeline to relieve some of the financial burdens they’re facing.

Though the Fund was first launched in response to the COVID-19 pandemic in March 2020, it has since become permanent – due to the growing pressure on the cost of living and more families needing our help.

To get a picture of how the fund has supported families over the winter, we analysed grant applications from October 2021 to March 2022. We also surveyed frontline staff about the financial challenges faced by families.

We must act now

The government can no longer remain blind to 4.2 million children living in poverty

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What we found

Recently, we've seen more families in need. Over 2,000 of all applications were submitted in the winter of 2021/22 – with 6,036 children and 2,494 families helped.

Why is this happening?

This is consistent with our analysis of applications to the Crisis Fund over winter 2021/22. It showed that 39% were triggered by a recent increase in household spending, and nearly 1 in 5 (18%) highlighted the end of the £20 a week uplift to Universal Credit as a cause of the family’s difficulties.

We know that benefits aren't protecting families from persistent financial hardship. Over the winter, 54% of families turning to the fund for emergency help were on Universal Credit.

Without the Action for Children grant, 31% of families would've struggled to feed their children over the winter period, and this was even higher among those claiming Universal Credit (37%).

Rising costs and low incomes have left families struggling to stay on top of regular bills and heating and feeding their families.... Our funds are greatly appreciated by anyone who has received them and has eased a great financial burden, but only for a short period.

Family support worker, Northern Ireland

The financial hardship our frontline staff see is already among the worst they can remember. And they don't hold a positive outlook for the future.

As much as the Crisis Fund provides a vital lifeline for the families that we support, it's no substitute for direct government action. It's not enough to fill the gaps of financial support.

Read the full report

What we’re calling the government to do

We believe the government should:

  1. Provide targeted relief to low-income families with children by increasing the Child Element of Universal Credit.
  2. Ensure benefits keep pace with the cost of living by providing a mid-year uprating for benefits to match current inflation levels.
  3. Develop a cross-government strategy for reducing and ultimately eradicating child poverty across the UK.
We must act now

The government can no longer remain blind to 4.2 million children living in poverty

Email your MP (opens in a new tab)