Living costs rising faster for families
The latest annual update of the minimum income standard (MIS) shows that, while living costs have risen by about 5%, families with children need to earn a lot more than that to meet the minimum income standard. MIS is based on what members of the public think people need to achieve a socially acceptable standard of living.
Key findings from the research, published by the Joseph Rowntree Foundation, include:
To meet the minimum income standard, per year:
- A single person needs gross earnings of at least £15,000.
- A family of four with a single earner need gross earnings of £31,600.
- If both parents work, they need to earn £18,400 each - a total of £36,800.
- A lone parent with one child would have to earn £18,200.
This makes it harder for low-paid women to earn enough even to cover the cost of childcare.
Inflation raised minimum household budget costs by around 5 per cent in the year to April 2011, slightly faster than main Government inflation measure, the Consumer Prices Index (CPI). Over the past decade, the cost of a 'minimum' basket of goods and services has risen by 43 per cent, compared with 27 per cent for CPI.
Out-of-work benefits remain well below people's requirement for a minimum living standard. Over the past three years, benefit levels have deteriorated relative to the income required to meet people's minimum needs.
The personal tax allowance rise in April 2011 means that for a single person to afford the minimum, the wages required have increased by less than inflation.
For families with children, by contrast, the earnings required to make ends meet have risen much faster than living costs, because Child Benefit has been frozen and tax credits reduced for many families. Typically, families requiring childcare would have to earn over 20 per cent more in 2011 than in 2010 to meet the shortfall.
You can download a copy of the summary and full report from Joseph Rowntree Foundation.
Find out more about low-income families in London.
Posted on 5 July 2011
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