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How is the cost of living crisis affecting public health?

Soaring costs are widening health inequalities, weakening food security and diminishing health and social care. With support services already under intense pressure, the cost of living crisis raises major health concerns for the most vulnerable.

The cost of living crisis is a health crisis. Since inflation started rising in late 2021, economists have not only warned of its harm to businesses and the economy: they have also sounded the alarm on its dangers to the health and wellbeing of people around the world.

The threat that the cost of living crisis poses for health primarily results from greater food and energy insecurity, higher stress levels and reduced provision of health and social care.

This article draws on expert analyses from the Economics Observatory and elsewhere, to help define how these factors threaten the health of different groups in society, both in the UK and in poorer countries.

Out-of-reach essentials

Our health is deeply entwined with our income – and the most obvious way that money shapes our health is through what we can afford to buy.

Many more people across the globe are finding food and energy unaffordable. Russia’s invasion of Ukraine in February 2022 cut the supply of staple grains and oil massively. This pushed up what were already high food prices.

At this point, and as we clambered from the depths of the pandemic, businesses were already passing rising production costs on to customers in the face of disrupted supply chains and mounting demand.

Rocketing fuel costs, triggered by sanctions on Russian oil companies, have not just inflated energy bills. They have also sent up the cost of producing, storing and transporting food and fertiliser.

These short-term shocks – and the much deeper problems they exacerbate – have led to inflation rates that far outpace wage growth. In turn, they are undermining food and energy security. The public health effects around the world could be grave.

The global picture: greater famine and starvation risks

Domestic food price inflation remains high in almost all low-, middle- and high-income countries (World Bank, 2023). But the ripple effects of Russia’s war against Ukraine have hit developing and emerging economies the hardest.

These countries are more reliant on Ukraine and Russia for fuel and grain imports. The top three importers of Russian wheat were Turkey, Vietnam and Indonesia in 2018. Indonesia, the Philippines and Morocco imported the largest share of Ukrainian wheat that year. 

Further, households in poorer countries devote a greater share of their income to food. The World Bank estimates that poor households in sub-Saharan Africa spend around 75% of their income on food. This compares with 10.8% for the average UK household in 2019/20.

Higher food prices push more people into the food poverty trap – where they cannot afford a nutritious diet or even enough food at all. According to analysis from the United Nations Food and Agriculture Organization (FAO) in 2022, the Ukraine conflict could lead to between 7.6 and 13.1 million more people becoming undernourished globally in 2022/23.

Rising prices induced by the conflict add to the mix of constraints on food supply. For many low- and middle-income countries, these include extreme weather, war, political instability and, of course, weaker economies.

In turn, the risk of famine intensifies. An estimated 49 million people – an all-time high – in 46 countries live in near-famine conditions, according to FAO and World Food Programme (WFP) figures published in 2022. Further, 750,000 people are at immediate risk of starvation, about 75% of whom are in Ethiopia and Yemen.

Of further concern, the FAO and WFP report that sharp hikes in operating costs and reduced funds are undermining the ability of humanitarian organisations to support famine-hit communities and prevent starvation.

The UK picture: ‘eugenics-by-negligence’?

The prices of food and non-alcoholic drinks in the UK have risen at the fastest rate since 1977 in the past year, with an annual inflation rate of 19.2% in the 12 months leading up to March 2023.

In the same period, electricity prices in the UK rose by 67% and gas prices by 129% (ONS, 2023).

These hikes force a growing number of people in the UK to make painful decisions about what to eat and how to stay warm. Some groups in society are more likely to face these decisions than others. Among respondents to the ONS 2022/23 winter pressures survey, the following were most likely to report struggles with food and energy bills:

  • people suffering with symptoms of depression;
  • people who are economically inactive (other than the retired);
  • people living in the most deprived areas;
  • younger people – those aged between 16 and 29;
  • and people with disabilities.

The food bank network, the Trussell Trust, say that they have distributed nearly three million emergency food parcels in the past year (2022/23). This is their highest number yet, a 37% increase on the previous year, and one that they say reflects the growing inability of incomes to cover the cost of essentials.

ONS data from the winter of 2022/23 further suggest that:

  • one in 20 people (5%) of people in Great Britain cannot buy enough food;
  • one in five (20%) say they are ‘occasionally, hardly ever or never able’ to keep comfortably warm;
  • and in disadvantaged areas, one in four (25%) report some difficulties in being able to stay comfortably warm.

As suggested by the ONS survey, the crisis is disproportionately affecting people with disabilities. Some disabled people – for example, those recovering from cancer treatments – may need additional heating in their homes. Others use assistive technologies, which need regular charging, or need to eat specialist diets.

Because disabled people often face economic exclusion – with higher rates of unemployment, under-employment and worklessness – rising costs are especially hard to manage.

Many people on lower incomes will replace healthier food options with cheaper, more processed food, or even go without. Less healthy diets and colder homes are far from trivial issues. Eating less nutritional foods can result in rising obesity and increase the risk of long-term chronic conditions, such as diabetes and cardiovascular disease.

Children with poor diets early in life have worse health and do less well at school. In the winter of 2021/22, cold homes caused 45 people to die every day, on average, in England and Wales, according to the charity National Energy Action.

The cost of living crisis is thus widening health inequalities in the UK with potentially long-term and devastating impacts. As one Economics Observatory author puts it: ‘We run the risk of entering an indefinite phase of eugenics-by-negligence by allowing the continued rise of poverty and health inequalities’.

How does the cost of living crisis affect our mental health?

Money not only allows people to buy enough food and energy for a healthy life: it also alleviates worry. Sharp increases in the cost of living hurt people’s mental health. This can be a vicious circle. Financial vulnerability and worries are strongly associated with poorer mental health, which in turn makes it harder for people to make financial decisions.

A 2023 analysis in The Lancet concludes that planned rises in the UK’s energy cap would take 4.8 million more people into poverty (a 7.2 percentage point increase). This could translate into almost 110,000 additional working-age adults, around 30,000 additional older people and over 440,000 additional children suffering with depression, anxiety and other common mental health disorders.

The same analysis highlights the domino effects of financial hardship: a sense of desperation can lead to further financial difficulties and physical health risks, for example, through ‘self-medicating’ with alcohol or drugs.

With fewer resources to cover rising bills, many poorer households are taking on debt just to get by. Research from the Joseph Rowntree Foundation (JRF) in 2022 showed that 4.6 million people in the UK were already behind with bills in May 2022, up a fifth compared with six months earlier in October 2021 (JRF, 2022). In addition, the report found that:

  • more than a million people were taking on debt just to cover essential bills;
  • almost a fifth of low-income households were in debt to high-cost lenders including loan sharks, amounting to £3.5 billion in debt;
  • and another £2.3 billion was owed to ‘buy now, pay later’ providers such as Klarna or Clearpay.

Debt and arrears like these can affect people’s mental health significantly. Nearly half of people with problem debt also have a mental health problem, and 40% say their finances have made their mental health problems worse, according to data for England from the Money and Mental Health Policy Institute. Financial difficulties also affect recovery rates, with people 4.2 times as likely still to be suffering from depression after 18 months if they are in problem debt.

These debts will not disappear when inflation starts to fall, and the economy returns to something closer to stability. For many on low incomes, opportunities to save for the future or pay off debt are severely limited.

How does the cost of living crisis affect support for patients and social care users?

Squeezed budgets for health and social care

The immediate health effects of the cost of living crisis add up to poor nutrition, declining mental health and a worsening of existing health conditions.

The crisis is therefore likely to increase demand for healthcare services. But if operational costs are higher than expected, healthcare providers will have to provide fewer services, unless efficiency savings can be made. Further, low GDP growth renders the state less able to raise taxes that pay for those services.

Although UK healthcare services have been protected against cuts to funding during the pandemic, the NHS was already stretched from Covid-19 when we entered the cost of living crisis. Waiting lists are the longest that they have been in two decades.

Rising costs also mean that more people in the UK will need publicly funded social care than before, because they will deplete their savings more quickly.

While the government has announced additional funding for social care, inflationary pressures faced by local authorities and providers threaten to offset some of these gains. For example, the additional £4.7 billion funding available for social care by 2024/25 will provide fewer care packages than previously estimated, given rising costs. The social care sector will also face greater pressures than many other public services because it has been historically underfunded in the UK.

Health and social care are far from the only services that support our wellbeing. Current cost pressures are also threatening the safety nets that protect against the consequences of poverty (Broadbent et al, 2023). Charities, schools, food banks, community centres, libraries and museums (some of which act as ‘warm havens’) are all facing increased costs, not least for energy, and funding pressures.

Overwhelmed and underpaid health and social care workers

The UK is suffering from long-term shortages of front-line staff in both health and social care, people who are themselves far from immune from the cost of living crisis. The social care sector, for example, includes among the lowest-paid occupations in the UK. Most (71%) of its staff are paid below the real living wage. The median hourly wage in the sector is £9.50.

Between October and December 2022, the average total pay growth for the private sector was 7.3%, but only 4.2% for the public sector (ONS, 2023). While care workers are predominantly private sector employees, their wages largely track trends in public sector pay. Given that inflation currently stands at over 10%, public sector and care workers have experienced a significant fall in real wages.

At a time when health and social care staff are wrestling with huge post-pandemic workloads, a fall in real wages is likely to give greater reason to seek work elsewhere. A further fall in the size of the health and social care workforce has serious implications for the quality of care and health outcomes for service users.

The potential effects of the cost of living crisis on unpaid carers must also be considered. Around 8-10% of the UK’s population provide or receive unpaid care. The support needs of those who receive unpaid care, and the commitment made by those who provide it, can often strain family finances. Carers, both paid and unpaid, also face an additional burden on their own finances through higher fuel costs, where they regularly visit or drive care receivers.

Unpaid carers often suffer with poorer physical and mental health – with implications for those for whom they care. But the axing of many public health protections during the pandemic – including care packages and support services, such as day centres – has intensified many unpaid carers’ roles. This has led to exhaustion and burnout for many. The added burden of stress imposed by the cost of living crisis is particularly concerning for this group.

A worrying outlook

The current cost of living crisis is likely to cast a deep shadow over people on low incomes, long after those who are better off feel that the sun has come out once again.’

Helen Barnard, Joseph Rowntree Foundation, writing in an Economics Observatory article.

The outlook for health is worrying and could be set to worsen if the cost of living crisis drags on. While crises and traumas always have long-lasting consequences that affect people across all income groups, they are often particularly severe and long-lasting for those with fewer resources.

Analyses of the health effects of the cost of living crisis paint a grim picture that must not be ignored. It forces us to confront the reality of who is suffering most, while underscoring the need for targeted support. Further, it shows that the crisis exacerbates pre-existing issues – a message that only intensifies the urgency of tackling these deep-rooted challenges.

Where can I find out more?

Who are experts on this question?

  • Helen Barnard, Pro Bono Economics
  • Andrew Dilnot, Chair of Commission on Funding of Care and Support
  • Elaine Kelly, The Health Foundation
  • Carol Propper, Imperial College London
  • Hiba Sameen, The Health Foundation
  • Thomas Shakespeare, London School of Hygiene and Tropical Medicine
Author: Michelle Kilfoyle
Photo by monkeybusinessimages for iStock

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