Millions of poor families in Britain would need their income to rise by thousands of pounds just to make ends meet, according to new research.
The Joseph Rowntree Foundation (JRF) study found that the minimum budget required by most households to have a decent standard of living has risen by about a third since 2008.
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A single person needs to earn £18,400, while working parents with two children need to earn at least £20,000 each, the study found. Pensioners appear to have become less frugal, with their budget aligning to those of working adults.
The foundation warns that despite an increase in the national minimum wage, low-income families are falling further behind a minimum income standard.
“Because of cuts in tax credits, the annual disposable income of a single parent working full-time on the minimum wage will fall short of the minimum by £3,640, or 20%, against a shortfall of just £530 a year, or 3.5%, in 2008,” reports the Financial Times.
More than 19 million people are living in households with incomes below this standard, up by 3.4 million since 2008, said the think tank. “These figures show just how precarious life can be for low-income households,” said JRF chief executive Campbell Robb.
How was the minimum required income calculated?
People from all walks of life in the UK were surveyed in order to determine what is needed to meet basic needs and participate fully in society. The standard is based on adults in urban areas outside of London.
These needs have remained broadly unchanged over the past ten years. Along with housing, clothes, food and bills, money for physical activities for children and for a yearly low-budget holiday in the UK is viewed as a basic requirement.
A functioning smartphone and laptop have been added to the list, but this has led to a fall in overall communications costs and to savings in other areas, by enabling families to shop and compare costs online.
Transport requirements have changed more than any other category. Around 20% of minimum household budgets now go on transport costs, compared with around 10% in 2008. This increase is partly down to higher public transport fares, but also because people feel they must now be prepared to travel further for work, and to rely more on taxis or driving as a result of cuts to bus services.
Childcare costs have also risen sharply, making it “substantially more expensive to meet minimum childcare needs”, the study found.