A fund of up to £20 million has been launched to help tackle poverty by offering alternative services such as energy and insurance to people on low incomes.
The Joseph Rowntree Foundation said millions of people faced a “poverty premium” of over £1,000 a year for some households because they pay more for essential goods and services.
The social research group is backing the Fair By Design Fund which will invest in ventures aiming to help low-income households pay less for energy and insurance and have access to alternatives to pay day loan companies.
Campbell Robb, chief executive of the JRF, said: “Households in poverty are four times more likely to be behind with at least one household bill and are more exposed to the rising cost of living.
“The poverty premium is costly and an unjust penalty for living on a low income. It’s a sign of market failure, which we need to end urgently.
“Investors, businesses and social enterprise have a huge part to play in solving poverty in the UK. It’s time to make life affordable for everyone.”
Other groups backing the fund are the Big Society Capital, Nominet Trust, Ascension Ventures and Finance Birmingham.