The National Red Index: how to turn the tide on falling living standards – A Citizens Advice report

Negative budgets – a damning measure of living standards

We’re in the problem business. Our advisers help people with more of them than anyone else in the country – nearly 9 million a year. So we have a pretty clear view of the most urgent problems facing Britain as we head into an election year.

And it’s been heartbreakingly clear what the biggest problem is over the past two years: negative budgets. Last year, we sounded the alarm that half the people we help with debt are in a negative budget – where even after expert advice, they have more going out than coming in. 

A negative budget is the ultimate red line between making ends meet, and being pushed deeper and deeper into trouble. Like quicksand, it’s hard to get out of once you’re in. And while negative budgets are the worst of this problem, so many more people come to us feeling like they’re just living on empty, running to stand still, worrying about what the future holds. 

This is a stark warning that while our advice can be life changing, it’s not always enough to pull people out of the red and into the black. It’s not for lack of trying – negative budgets are a failure of policy, not advice. Successive governments haven’t addressed fundamental policy issues – especially the supply of affordable housing – leaving millions of households struggling to make ends meet on stagnant incomes. 

So when the cost of other essentials like energy and food spun out of control in recent years, there was nowhere to go but down. People made tough decisions, cutting back on heating and eating, but this only takes you so far. Some costs can’t be cut. 

The full report can be found here: