Five ways to cope when you’re living on a deficit budget

A deficit budget happens when a household’s income (whether from wages or benefits) isn’t enough to cover essential living costs, such as rent, utility bills, food and clothing.

Almost half of those who seek help from CAP have a deficit budget (47%) and would need, on average, an additional £273 per month in income to make their budget to balance.

As the imbalance between essential costs and household income grows, churches tackling poverty across the UK are going above and beyond to support people. Many provide food banks, as well as clothing and toy banks, drop-in centres and more, and are standing in the gap as many other support services struggle to cope with the demand. Plus, hundreds of churches across the UK partner with CAP to deliver free debt help, life skills groups, job clubs and financial education courses. 

Get in touch with local churches in your area and find out how they may be able to support you.

On paper, social security is a safety net for those of us who are unable to work. Unemployment, ill-health, taking on caring responsibilities – these are all events that can hit us when we least expect it, and social security should be there to support us through these situations. However, billions of pounds’ worth of benefits go unclaimed every year, and with millions of recipients unable to afford the basic essentials they need to survive, now is the time to check if you’re entitled to support.

CAP’s online benefits calculator is a quick, easy way to check you’re receiving all the support you can. The free tool has seen more than 24,000 people find extra income they didn’t realise they were entitled to, at an average of £565 per person per month – a potentially life-changing amount of money for those facing a deficit budget.

Whether you’re receiving benefits or a wage, there are also various charitable grants for low-income households available, which you may be eligible to receive.

If you’re struggling to pay your bills, we highly recommend speaking to your mortgage provider, energy supplier and local council, as they may be able to offer a payment holiday or reduce your bills temporarily. For example, some councils offer reduced Council Tax rates for low-income households. It’s better to be open, honest and realistic about what you can afford to pay than struggling in silence.

There are also lots of free resources and information online to help you look at ways to realistically reduce your spending, including practical guidance on building a budget and improving your financial situation. We know very well that, for many people, a deficit budget exists despite careful planning and cutting back on spending. However, if you haven’t already given it a go, we’d really recommend using these resources. What’s more, thousands of churches offer free money coaching in communities like yours, helping people just like you to explore ways to save more money, build a budget that really works, and lift some of the pressure that living on a low income can bring.

Financial difficulty can be extremely isolating. It’s not uncommon for people to wait years before seeking help, for reasons that range from feelings of shame and embarrassment to not believing anyone would be able to help. Delays in seeking help can cause the problem to worsen, and going without vital support networks can be damaging to our mental wellbeing. It’s so important to know that we’re not alone in the challenges we’re facing.

Beyond the practical help that many churches are providing, the love being shown by God’s people is breaking the chains of isolation that so many become trapped in. Melinda, who has lived on a deficit budget, reflected on the impact of getting in touch with her local church:

If you’re struggling:

• Be open with friends and family about your financial situation.

• If you’d prefer to talk to someone impartial about money worries or other challenges you may be facing, free support is available from a range of sources, including CAP.

• Attend a church service or event in your area, where you’ll find a ready-made community on hand to support you.

As those with the power to make decisions that affect our bills and costs, it’s vital that the Government is aware of not only how common the problem of deficit budgets is, but also the devastating impact on people’s lives. If you’re living on, or have previously faced, a deficit budget, we’d urge you to share your experiences with your local MP. This might be through email, or by setting up a one-to-one meeting where you can have a conversation and hear first hand how your representative intends to tackle these issues. Find out who your local MP is, and how to get in touch.

If you’d like to advocate for change by sharing your story more widely, our Stories Researcher, Lydia, would love to hear from you via [email protected].

Our latest briefing paper,​‘Deficit budgets: The cost to stay alive’ explores the severe consequences of deficit budgets in households across the UK and pushes for urgent systemic change.