‘Caught in the middle’: how middle-income families are managing the rising cost of living 

Published: 17 Apr 2024

Through our free legal advice service and advocacy efforts, Working Families speaks to families from all walks of life. Those with the least are often impacted the most when it comes to the spiralling costs of recent years, but they aren’t the only ones feeling the effects. The ‘Caught in the Middle’ report by abrdn Financial Fairness Trust (FFT) found that 20% of those in the middle fifth of the income distribution were struggling to pay for food and other essentials. An insecure jobs market, high housing and childcare costs are all contributing factors which have led to a growing number of middle earners struggling on household incomes of up to £60,000. Families such as the Dykes. 

Each month working parents Mel and Chris Dyke must calculate how to stretch their joint income of £60,000 to cover rising living costs. The couple, who are both military veterans, earn decent wages – Mel as an NHS health visitor and Chris a civil sector training manager – but rely on the buffer of their overdraft and daily sacrifices to provide for their three children.  

Mel explains:

We’ve had to make lots of everyday changes to save money. We’ve used up lots of our savings and don’t really have any money left to save as we’re in our overdraft each month.  

Food shopping is crazy expensive. I used to spend £80-£100 a week for a family of five, it’s now gone up to £150 to £170. And it’s nothing luxurious, just everyday items. I do a Tesco online shop so I can keep track of how much it is and stop when it goes over budget.

Mortgage payments on their four-bed detached house in Staffordshire have increased by £600 a month, which combined with the rising costs of food and energy means the Dykes struggle to stretch their wages each month. Mel has had to increase her working days from three to four but is hesitant to take on more as it means missing out on being able to take an active part in the lives of her children aged three, 7, and 11. They have already had to take their youngest out of nursery and put them in pre-school because it’s cheaper and stop his swimming lessons.

Working full time comes with its own demands and the cost of childcare but also managing the children’s social lives. I take them to all their clubs and activities, which is really important. That’s why I work – so my kids can do these sorts of things. 

The impact of high childcare costs is felt acutely by Aisha and her partner Tom, who live in London. They have struggled financially since the birth of their first child last May. As a freelance graphic designer, she has had to cut back on work considerably since becoming a mother and used all her savings to supplement their income while on maternity leave. Tom, a doctor, earns £55,000 a year and is now the primary earner:

I want to start working close to full-time again but at the moment we can’t afford the childcare. I need to work more to earn more but don’t have enough money to do that right now. So we’re kind of stuck.

With reserves exhausted, there is little to no wriggle room for families in the event of something unexpected, that could easily push them over the financial brink,

We pay rent and bills, buy food and things for the baby but that leaves nothing leftover. If anything happened, like a rent increase or unexpected bill or we would be screwed.

There is no straightforward solution for these families. Instead, the answer lies in a combination of initiatives that Working Families have prioritised in their campaigning; better parental leave, a high-quality and affordable childcare system, and easy access to flexible working arrangements, enabling every parent and carer to work flexibly if they choose.  

Flexible working has a key role to play in helping families rely less on expensive childcare, as well as enabling people with caring responsibilities, mainly women, to progress in their careers and earn more income. Our research showed that 3 in 10 UK parents are currently working in jobs below their skill level because their jobs offer greater flexibility. Broadening the pool of flexible jobs, especially senior roles, would enable parents and carers to develop careers whilst also managing their caring responsibilities.  

Whilst the cost of living isn’t expected to fall significantly any time soon, changes in government policy, an improved childcare system and flexible working would enable families like the Dyke’s and Aisha and Tom to feel like they are thriving, not just surviving.