The real rise in British families' cost of living: 20 per cent
Tuesday 05 July 2011
The cost of maintaining an acceptable standard of living has soared by up to a fifth for families in the past year, according to research published today.
Families with children have been hit much harder by the Coalition's public spending cuts than other households, the Joseph Rowntree Foundation said. A couple with two children now needs to earn at least £18,400 each if both work full-time, according to the social research charity.
This is because child benefit has been frozen and tax credits reduced, in particular those that help low-income families to meet their childcare costs.
Income requirements for other groups have not risen so fast over the past 12 months. The wages needed by a single person with no dependants have actually risen by less than inflation, once the increase in the personal tax allowance in April has been taken into account. A single person now needs £15,000 a year to meet the minimum income standard.
Pensioners, meanwhile, should have an income close to their minimum requirement, the foundation says. However, that is only as long as they claim all the benefits they are entitled to. A pensioner couple now needs to spend £233 a week on essentials, net of rent or a mortgage.
The author of the report, Donald Hirsch, of the Centre for Research in Social Policy at Loughborough University, said: "The squeeze in living standards caused by the combination of rising prices and stagnant incomes is hitting people on low incomes hard. This is partly because the prices of certain essentials like food have risen, but also because of policy decisions that have reduced what families have to live on."
He said that, in particular, the reduction in support for childcare has made many low-earning families worse off. "In the process, for families who need to use childcare, it has substantially reduced the incentive to work on relatively low pay," Mr Hirsch warned.
Over the past decade, the cost of a minimum basket of goods and services has climbed by 43 per cent, compared to a 27 per cent increase in the Consumer Price Index. The minimum income standard for Britain was first calculated in 2008.
The latest Legal & General MoneyMood survey shows 1.3 million families are worse off than they were nine months ago. Twelve million of the UK's 21 million households now spend all their money on bills and debt payments, up from 10.7 million nine months ago. The rise leaves 57 per cent of households on a fine balance between managing to pay bills and sinking into debt, compared to 51 per cent in September.
- 1 I've been called an abusive and dangerous parent, when all I did was listen to my transgender child
- 2 Smartphones are making children borderline autistic, says psychiatrist
- 3 Why this father didn’t hide his daughter’s heroin overdose in her obituary
- 4 Company breaks open Apple Watch to discover what it says is 'planned obsolescence'
- 5 Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
Smartphones are making children borderline autistic, says psychiatrist
Nepal earthquake: More than 1,100 killed across four countries and in Mount Everest avalanche
Nepal earthquake: The race is on to help thousands trapped under rubble around Kathmandu, while remote villages face a long wait for help
Royal baby: Live updates as superbug closes ward at St Mary's Hospital where Duchess of Cambridge is due to give birth
Teaching profession headed for crisis as numbers continue to drop and working lives become 'unbearable'
General Election 2015: Chuka Umunna on the benefits of immigration, humility – and his leader Ed Miliband
The sickening truth about food banks that the Tories don't want you to know
Migrant boat disaster: Ukip candidate mocks victims in sickening Twitter post
Nigel Farage wants the BBC to stop making programmes like Doctor Who, Strictly Come Dancing, and Top Gear
Global warming: Scientists say temperatures could rise by 6C by 2100 and call for action ahead of UN meeting in Paris
General Election 2015: Britain would become a 'communist dictatorship' under Ed Miliband and Nicola Sturgeon, claims wife of Michael Gove
iJobs Money & Business
£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...
£50000 - £55000 per annum: Ashdown Group: Business Analyst - Financial Service...
£18000 - £23000 per annum + OTE £45K: SThree: At SThree, we like to be differe...
£20000 - £25000 per annum + competitive: SThree: Did you know? SThree is the o...