Sunday, July 08, 2018


Low-income families can’t function financially according to a new report from the Joseph Rowntree Foundation, which shows that those with small wage packets are considerably worse off than they were 10 years ago. In fact, they would need a third more disposable income to make ends meet, despite tightening their belts and shopping around for the best deals. And the measure isn’t some arbitrary percentage of average incomes either. It’s a barometer of living standards in the UK based on what the public believes is necessary to achieve a decent minimum living standard.

That minimum income standard (MIS) means being above the poverty line and able to afford healthy food, a low-cost UK holiday and some after-school activities for children, among other things. The worrying truth is that low-income households are further away from achieving that than they were in 2008. Back then, a lone parent working full-time on the minimum wage, helped by tax credits, had annual disposable income just £520 a year (3.5 per cent) short of MIS. But today they are £3,640 a year short (20 per cent). A couple who both work full-time on the minimum wage and have two children are about £2,600 a year short of the MIS and a single breadwinner family are £6,240 short. It’s a stark change in living standards for people in low-income households. 

“The past decade has been particularly difficult for families on low incomes as costs have risen faster than the Consumer Prices Index, while the support they get from the state to help cover these costs has risen more slowly,” Professor Donald Hirsch, director of the Centre for Research and Social Policy, says. For people struggling on low incomes, the brutal truth may be that they simply cannot afford a minimum standard of living until and unless there is some change to benefits or affordability. But these increasing costs also reverberate up the income brackets, leaving many additional people struggling to manage even if their situation is not as desperate as those on the lowest incomes.

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