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Minimum standard of living missed by families due to inflation and cuts

New research from the Joseph Rowntree Foundation has found that the recent rises in inflation and cuts to state benefits has seen low-income families fall further behind the minimum income standard. As a result, the average family of four in the UK need at least £40,800 a year in order to achieve a decent standard of living.

Despite an above-inflation increase in the national living wage, low-income families are falling further and further behind the minimum income standard which is putting an adverse strain on their budgets, particularly when it comes to affording the basics and necessities for their family and household. The latest announcement that inflation has fallen for the first time April 2016 is welcomed.

As in-work benefits have fallen and in some cases been cut altogether, low-income families with children have struggled and lone-parent single-breadwinner families have been hit the hardest.

The standard of living amount, as provided by the Centre for Research in Social Policy at Loughborough University, is not a measure of poverty and is based on feedback from the public on what they feel they need to achieve a decent living standard. It takes into account Christmas presents, money for school trips and swimming lessons amongst other things such as the price of energy, food and transport.

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Chief executive of the Joseph Rowntree Foundation, Campbell Robb, commented on the findings; “Struggling families tell us, as well as juggling the bills, it’s things like after-school clubs and swimming lessons that have to be sacrificed to cover the essentials. With the Bank of England forecasting inflation will increase even higher this year, families are facing no respite.

“We need the government to take action and ensure living standards do not fall backwards. Lifting the freeze on working-age benefits and tax credits must be the start, along with allowing people to keep more of their earnings.”

Although the national living wage rose by 30p to £7.50 earlier this year, any gains households may have made have been offset by the rise in the cost of living and freezes to tax credits and benefits. According to the research, a single person will now need to earn £17,900 a year and a couple which both earn a wage with two children need to earn £20,400 a year to reach the minimum income standard.

For a lone parent with a child of pre-school age, they would need to be earning £25,900 a year to achieve the minimum income needed to achieve the current decent standard of living. The Joseph Rowntree Foundation argues that developments over the past 12 months have made it difficult for many households to achieve these levels of earnings.

Frances O’Grady, general secretary of the TUC, spoke to the Guardian about the research by the Joseph Rowntree Foundation; “The government needs a proper plan to get wages rising. Ministers must stop holding down the pay of public sector workers, and give them their first proper pay rise in seven years. The minimum wage needs to rise faster, to reach £10 an hour as soon as possible.”

As the standard of living rises out of reach of many, more and more households are consistently falling short of the minimum income level they need to hit. Consequently, the pressure is starting to pile up on the government to help struggling families through tax breaks, a rise in benefits and to provide help to push up the average earnings of many private and public sector workers.

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