Monday, May 23, 2022

Cost of Living Increases

 Basic goods and services for a typical family with two young children are about £400 a month more expensive than they were last year. Energy prices added about £120 to families' monthly costs as price caps rose and cheap tariffs ended. Transport costs, including petrol and parking charges, added at least £85 to families' outgoings, while childcare costs rose by £66 a month.

The cost of these basic household budgets - known as the Minimum Income Standard - has often gone up faster than inflation, which is calculated using prices across the whole economy. With inflation reaching a 40-year high of 9% in April 2022, families with two children face costs 13% higher than they did in the same month last year.

Pay is rising more slowly than prices, forcing many families to make tough spending choices. As well as the essentials needed to survive, like food, rent and heating, the budgets include things the focus groups believe are needed to take part in society, such as internet access, school trips and an annual family holiday in the UK.

Peter Matejic from anti-poverty charity the Joseph Rowntree Foundation says low-income households are hit the hardest by price rises: "Families in poverty are feeling the worst effects of the frightening jumps we are seeing in the cost of living, because more of their budget goes on essential items and their incomes just can't keep up."

Cost of living: Two-child families paying £400 a month more - BBC News

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