Paying with our health: Impacts of the cost-of-living crisis

Key points

• Andy Burnham has pledged to make the cost of living a priority, and the upcoming Budget presents an opportunity to turn commitments into practical support. Food and energy costs are putting people at risk of being unable to afford healthy food or a warm home, and further widening existing inequalities. 
• The cost-of-living crisis is a health crisis. When people cannot afford nutritious food or to keep their homes warm, their physical and mental health suffer. 
• Households are already reducing energy use, buying less or cheaper food, reducing savings or relying on credit and support from others. These coping strategies can damage health through poor diets and cold or damp homes, while financial strain can worsen mental wellbeing.
• The poorest households face a triple crunch, with the cost of essentials substantially higher than before the cost-of-living crisis, incomes struggling to keep pace with rising prices and essentials taking up a larger share of household spending. In 2024/25, food, housing, fuel and power accounted for 42% of spending among households on the lowest incomes, compared with 19% among households on the highest incomes.
• Between 2019/20 and 2024/25, financial pressures on poorer households intensified by almost twice as much as for households on higher incomes. The share of household spending that went to essentials increased by 14% among households on lower incomes, compared with 8% among households on higher incomes, and there was a much sharper rise in real-terms spending on essentials for households on the lowest incomes (17%) than for those on the highest incomes (1%). These differences really matter for health.
• Unequal pressures reinforce existing health inequalities. In 2025, 36% of households in the most deprived areas in England experienced low or very low food security, compared with 14% in the least deprived areas. People with long-term health conditions were also substantially more likely to experience very low food security.
• The immediate priority should be to support households through the winter helping to protect their health. The government should target support with energy costs towards those most at risk, including through the existing tax and benefit system; extend and promote support with problem debt through the Breathing Space scheme; and increase the local housing allowance to ease pressure on private renters.
• Long term, improving the energy efficiency and quality of existing homes through the Warm Homes Plan would help households both afford their bills and maintain healthy homes. Acting early will also help avoid the wider costs of ill health for individuals, the economy and the NHS.