People on low incomes face greater climate risks and fewer ways to adapt, making money guidance and financial resilience an overlooked part of climate action.

Climate change is often discussed as an environmental challenge. But in practice, its effects are closely tied to poverty, housing, health and financial security. 

The Climate Change Committee (CCC) warns that by the middle of the century, hotter heatwaves could leave 92% of existing UK homes at risk of overheating, while peak river flows could rise by up to 45%, increasing flood risk.

As the UK experiences more extreme weather, people on lower incomes are likely to face some of the greatest risks. People already facing socio-economic disadvantage can be more exposed to risks such as flooding and overheating, more vulnerable when they occur, and have fewer resources or choices to prepare, adapt and recover.

That raises an important question for organisations working to tackle poverty and disadvantage: should improving people’s financial resilience also be considered part of climate resilience?

The evidence increasingly suggests it should.

 More exposed, more vulnerable

Climate risks do not fall evenly across the population.

The Climate Change Committee (CCC) found that neighbourhoods in the most income-deprived fifth are more than seven times as likely to be among the most vulnerable to overheating, and more than ten times as likely to be among the most vulnerable to flooding, compared with the least deprived fifth. 

Part of that vulnerability is shaped by the places and conditions people live in. The CCC identifies housing quality, health and disability, and access to cooling, flood-resilient infrastructure and public services among the factors that influence how severely people are affected by climate hazards. 

Sandra Lemokowska, a Money Coach at Clean Slate delivering its Rainy Day Money programme, sees some of these pressures directly. Clients have described homes that are extremely cold during winter but become so hot in summer that they struggle to sleep.

Existing inequalities can compound these conditions further. Age, disability and existing physical or mental health problems can all make the consequences of heat, flooding and disruption more severe. Rhiannon Hawkins, University of Edinburgh PhD candidate in climate change, explains:

“If you are not able-bodied, if you’re not white, if you’re not middle-class, if you’re disabled or if you’re queer, you’re more likely to experience these problems – and it’s only going to get worse.”

Fewer options to adapt

Greater vulnerability is only half of the problem. People on low incomes can also have fewer resources and choices available to protect themselves or recover when something goes wrong.

That might mean being unable to pay for improvements to a home, flood protection, adequate insurance or repairs. Moving away from a high-risk area may simply not be financially possible. And when an extreme-weather event or unexpected bill hits, savings determine how much room a household has to respond.

Joseph Rowntree Foundation analysis shows that 22% of adults in households earning below £15,000 a year have no savings, while more than a third have less than £1,000. JRF’s winter 2025 research found that half of low-income families already going without essentials had less than £150 saved.

Many are already borrowing to meet basic needs. Among low-income households that had borrowed, 57% had done so to cover food, heating or priority bills including energy, water and Council Tax.

That leaves little capacity to absorb another shock.

Sandra supported one client who received a £640 water bill for six months after a suspected leak in a communal area of her building. Despite carefully monitoring her own water use, resolving the underlying problem depended on action beyond her control.

Another client described the wider effect of financial insecurity:

“Now I constantly worry about bills and getting into debt. I don’t sleep, I don’t see my friends and family because I don’t want to worry them.”

Joining up climate and money support

The policy response must include investment in resilient homes, infrastructure and public services. As Sam Alvis of the Institute for Public Policy Research has argued, resources should be directed towards protecting people who are least able to protect themselves and reducing the underlying risks they face.

But organisations working with people experiencing financial hardship also have a role to play. If financial insecurity limits people’s capacity to prepare for, respond to and recover from climate pressures, then improving financial wellbeing can form part of building resilience. 

ClimateKind offers one example of these areas being brought together. The London-wide initiative, led by Thrive LDN, received £1,499,958 over three years from The National Lottery Community Fund. Its partners work across climate action, mental health, research and community engagement, with a focus on groups disproportionately affected by climate change and wider inequalities.

Through this work, Clean Slate’s Rainy Day Money programme supports Londoners on low incomes to reduce money stress, improve their financial position and build resilience to future challenges.

As Clean Slate managing director Jeff Mitchell put it when ClimateKind was announced: “It can feel impossible to think about bigger issues like climate change when you’re worried about paying the bills.”

For climate funders and practitioners, this points to a broader understanding of resilience. Alongside investment in homes and infrastructure, a money-first approach can include income maximisation, debt and arrears support, social tariffs, help challenging incorrect bills, and access to grants and other entitlements.

Sandra Lemokowska believes these areas cannot easily be separated:

“I strongly believe that supporting Londoners in improving their finances while addressing mental health and climate change is not only possible but necessary.”

Money guidance cannot prevent a heatwave or compensate for inadequate housing. But it can increase the options available to people when pressures hit.

Image: Jane Hudson/BigStock