Left Out: How to tackle digital exclusion and reduce the poverty premium

Digital exclusion intensifies pain of cost-of-living crisis for low-income households already paying hundreds of pounds more for basic goods and services.

Our groundbreaking report sheds light on the hidden reality of digital exclusion in the UK. This report reveals that the number of households without internet access is nearly double the official estimates provided by Ofcom, indicating that the cost-of-living challenges disproportionately affect the poor and elderly.

Our analysis suggests 11 per cent of some 28 million UK households cannot access the internet at home.

In partnership with Virgin Money, this report sets out a three-pronged framework for easing the pain of digital exclusion: device access, digital connection, and digital capability.

It explodes the myth that limited digital access is solely a problem for the elderly. While over 65s do represent the majority of those who lack access to the internet at home, 29 per cent are of working age.

Worryingly, 42 per cent of those on low incomes without access to the internet at home are of working age.

These findings follow on from our previous research that showed digital exclusion can lead to poverty premiums, where those on the lowest incomes pay more for basic goods and services.

It found that nearly seven million people in Great Britain were paying multiple poverty premiums and that this cost them nearly £500 extra a year for essential goods and services, including food, insurance, and credit.

Digital exclusion is likely to increase the costs consumers pay as goods can be more expensive offline. Without internet access, consumers can pay as much as 25 per cent more on essential goods and services.

Working age digitally excluded consumers are considerably more likely to face economic challenges because they are significantly more likely to be unemployed (22.1 per cent as against the national average of 3.8 per cent). Even among those who are employed, consumers with limited digital skills are far more likely to be in low-income jobs. Reducing digital exclusion and improving digital skills could therefore improve consumers’ job prospects.

We call on the Government to work with businesses to tackle the poverty premium. It proposes a new digital inclusion strategy and makes ten recommendations to tackle the three pillars of digital exclusion, including:

  • Reducing VAT on social tariffs to 5 per cent
  • Giving consumers greater confidence that social tariffs offer comparable broadband speeds,
  • A new digital skills programme, targeted at those who are unemployed and those with limited digital skills,
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