Families hit by crippling cost of living need a third more income to make ends meet

Article by the Joseph Rowntree Foundation

Latest research by Joseph Rowntree Foundation reveals how low-income families need a third more disposable income than a decade ago to make ends meet and are facing bigger barriers to meet rising costs – despite tightening their belts and shopping around online for better deals and tariffs.

Families hit by crippling cost of living need a third more income to make ends meet
The rising cost of transport, childcare and energy have restricted and restrained people who are struggling to get by, according to a decade of authoritative living standards research for the independent Joseph Rowntree Foundation (JRF).

The Minimum Income Standard (MIS), carried out by the Centre for Research in Social Policy at Loughborough University, acts as a barometer of living standards in the UK. It is based on what members of the public think we all need to achieve a decent minimum living standard, regularly updated as society and the economy changes.

A calculator allows the public to see the earnings different households need to reach MIS, according to members of the public. A single person needs to earn £18,400 a year to reach MIS; each parent in a working couple with two children needs to earn £20,000. A lone parent with a pre-school child must earn £28,450.

Since 2008, the cost of a minimum ‘basket’ of goods and services has risen by 35% for a single working-age adult without children, by 30% for a couple with two children and by 50% for a pensioner couple, compared to a 25% increase in the Consumer Prices Index (CPI). The types of goods and services required for a minimum living standard have remained broadly the same, but the cost and how people buy them has changed:

  • The cost of getting around. Public transport has become much more expensive and bus services have been cut. As a consequence, transport costs take up nearly a fifth of minimum household budgets. Bus travel is 65% more expensive in 2018 than in 2008. Members of the public say you need to be prepared to travel further to work and to make more use of taxis when public transport is not an option. For a single person, the minimum transport budget has risen from £17 to £37 a week.
  • The weekly food shop. On average the cost of food rose by just over a quarter between 2008 and 2018, but a minimum food budget for a single person rose from £29 to £44 a week, a rise of just over 50%.
  • Energy bills are over 40% higher than a decade ago, putting pressure on household budgets, despite the internet making it easier to shop around for better tariffs and more energy-efficient lighting making rises less steep for some households. If you work with the vulnerable or people on low incomes and would like some assistance advising them on how to save money on their energy bills please get in touch with our Energy Advisor Helen – Helen.Dean@ccberks.org.uk
  • Childcare costs have risen sharply. The average price of a full-time nursery place for a two-year-old is now £229 a week, having risen by well over 50% since 2008. The government’s emphasis on early years development is reflected in parents saying, unlike in 2008, that families should have the choice of nursery care for their pre-school children, rather than only being able to afford a childminder.
  • Technology is increasingly important as part of day-to-day life. People are spending less today on technology and are more connected than they were ten years ago. Broadband, a basic laptop and smartphone cost £8 a week today for a single working-age person, compared to £9.50 for a landline telephone and a pay-as-you-go mobile in 2008, despite inflation of 25%. Technology is also reducing minimum costs by enabling people to shop online and make price comparisons.

To read the rest of this article by the Joseph Rowntree Founcation please click here.

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