A low-income family in Greater Manchester could be paying more than £1,000 extra than the average household for everyday goods, a report by Greater Manchester Poverty Action (GMPA) shows.
The report, released last month, shows that low-income households across Salford are paying above average for necessities like fridge-freezers and sofas, forced to rent white goods from companies such as Brighthouse, who sell goods on credit at rates up to 99.9% APR.
Under such arrangements customer can buy a vacuum cleaner for £3 per week and end up paying £312 for a product that can be bought outright for £159.99
Charities and campaigners have been studying the potential extra costs for low-income families in the UK since 2016, labelling the gap a ‘poverty premium’.
Studies this year have revealed that low-income households in Salford could be paying nearly £1100 more than a typical family in the region.
Graham Whitham, the co-director and founder of GMPA, wrote the report. He said: “What we’ve found is that low-income families in Greater Manchester can be paying well over the odds for everyday goods and services.
“It can have a really big impact on families with lower incomes…it’s a real hit in their pocket.
“We know poverty is going up across the country because of central government policies, but the poverty premium is another hit on some people’s already limited budgets.
“It’s really important to do more to support credit unions because will be able to access low-interest loans, but there’s other things like food pantries, where people pay a weekly membership and have access to low-cost food.”
The report focuses on how basic shopping items are more expensive in deprived areas, because of a dependency on higher-cost local shops. Low-income families could be paying 36% more in local convenience stores compared to a larger supermarket.
The report also found that travel costs for low-paid workers living outside of Salford and Manchester are significantly higher than for people who live in the main cities.
An annual season ticket from Rochdale to Manchester City Centre costs £1,050, but workers living closer to the city have cheaper fares on Manchester’s Metrolink trams and shorter train journeys.
The report follows an appeal by Salford Foodbank for increased donations as the winter months set in and Christmas approaches.