Families need £36,800 to live acceptably, study says

 
Family of four Researchers questioned 21 focus groups to find the income standard

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A couple with two children now need to earn £36,800 a year to have a "socially acceptable" standard of living, an anti-poverty charity says.

The Joseph Rowntree Foundation said its annual minimum income study suggests families must earn a third more than in 2008, to live within social norms.

But the report has been dismissed as "mostly rubbish" by the head of think tank the Adam Smith Institute (ASI).

The government said it was committed to helping the UK's "most vulnerable".

The minimum income standard (MIS) study - commissioned by the charity from the social policy research unit at Loughborough University - suggests a rising number of UK people live below what the public believes is an acceptable standard of living.

This MIS standard includes earning enough to eat a balanced diet, run a car and heat the home.

Researchers questioned 21 focus groups made up of working families, pensioners and single people of working age on a range of incomes.

A couple with two children were said to need to earn a minimum of £18,400 a year each before tax; single people £16,400 a year, while the figure for lone parent with one child is £23,900 and a pensioner couple £12,000 each.

The study said families are being hit hard by a "dangerous cocktail" of rising costs and cuts in three main areas:

Start Quote

If, instead of thinking about the breadline, we consider what level of income is needed for an acceptable standard of living, the debate changes”

End Quote
  • Childcare: Minimum costs have risen by nearly a third since 2008
  • Travel: Bus fares have doubled since the late 1990s which when combined with cuts to public transport, means families with children now deem a car as an essential item
  • Benefit cuts: Earning requirements have increased substantially, cancelling out the benefit of higher income tax thresholds

JRF chief executive Julia Unwin said families faced a "monumental task" to earn enough to get by.

"Parents facing low wages and pressure on their working time have little prospect of finding the extra money they need to meet growing household expenses.

"Many working people face the risk of sliding into poverty. It illustrates how anti-poverty measures are needed to address not just people's incomes but also the costs that they face."

The research also states that the level of Universal Credit - the government's new benefits system being brought in January 2013 - will strongly influence the ability of households to reach MIS.

'Silly question'

Both the results and methodology of the study have been questioned by Dr Eamonn Butler, director of the think tank ASI, who said the report was "mostly rubbish".

What makes up the MIS?

Minimum weekly spend on some "socially acceptable" life essentials includes:

Household goods and services: Childcare: £147.85, beds and bedding: £3.29, garden equipment: £0.66

Food and drink: Meat £18.08, vegetables: £11.27, snacks: £3.65

Social and cultural: Parent social activities: £30.00, UK holiday: £18.52, birthday gifts: £8.42

Transport: Car: £60.25, public transport: £12.38, Cycling: £1.40

Based on a couple with two young children with a weekly income of £685

"If you ask a silly question you get a silly answer and I think this is a very silly answer.

"The idea that one needs a laptop, a DVD player, a microwave, a blender and a roof rack on your car and so on, and indeed a car in the first place when most of us live in cities and public transport has not actually changed very much in the last five years are very strange answers."

Dr Butler added that the study risks arousing people's expectations around welfare payments when "most of the public (75%) think benefits are too high".

But the study was defended by its co-author Donald Hirsch, who said the research was "significant" and "hugely robust".

"In terms of reliability... we have held over 100 groups over a period. Each group is checking back on what other groups say.

"It is not just one person at the ASI's opinion, it is groups of people coming to agreement... and then confirming it with subsequent groups," he added.

The government said it was forced to make "tough choices to repair the country's finances".

A spokesperson added: "It is vital that we give young children the best start in life and that is why we are rolling out free early education, backed by more than £1bn, to help children and their parents.

"We recognise that child care costs are an issue and that is why the prime minister launched a commission into this matter which will report back in the autumn.

"We are also introducing Universal Credit from 2013, which will simplify the system and ensure that work pays."

What is the minimum income standard?

Single working-age person Pensioner couple Couple, two children Lone parent, one child

Source: Joseph Rowntree Foundation

Weekly budget (excluding rent/childcare)

£192.59

£231.48

£454.52

£275.59

% increase since 2008

22%

15%

23%

31%

% of median income

77%

57%

77%

77%

% of budget* provided by Income Support/Pension Credit

40%

104%

60%

59%

Earnings

Weekly budget (including rent and childcare)

£262.25

n/a

£685.04

£502.80

Annual earnings required

£16,383

n/a

£36,728**

£23,861

Hourly wage requirement

£8.38

n/a

£9.39**

£12.20

* Excluding council tax ** If both members of couple work full time

 

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  • rate this
    -2

    Comment number 328.

    @thelostdot http://www.bbc.co.uk/news/uk-18770783?postId=113017441#comment_113017441

    well*
    scored well in intelligence tests*
    ... poor,* earning...
    I'd just* like to know what's going on?*

    *Corrected a few of your spelling and grammatical mistakes. Presumably that could be 'what's going on'. Though it could also be to do with the fact that:
    qualifications > (questionable) intelligence tests.

  • rate this
    +3

    Comment number 327.

    Me and my wife get by perfectly well on just over £36,800 a year. We don't regard ourselves as being particularly well off, but we're happy with what we've got.

    And money isn't the answer to everything. We got by perfectly well on a lot less than our current earnings when we were students.

  • rate this
    -1

    Comment number 326.

    We are all going to need a cut in our incomes and increase in our taxes, in order to finance those people from Europe who are coming to Britain to claim Benefits.

  • rate this
    +1

    Comment number 325.

    So let's see what this means:
    First of all it will mean that the cap on benefits will be increased from £26,000pa to £36,000.

    However, those who work for living will not see a rise in minimum wage, still get paid £20,000pa or less, and then see their tax rise to support those on benefit so that they can have a "necessary" standard of living. How is this any of this fair?

  • rate this
    0

    Comment number 324.

    @313 I don't understand why people think that people need encouraging or forcing into work. It's simply the case that there are not enough jobs for people that want them, let alone the people that don't. Punishing people for not having a job in the middle of a recession is like taking away aid for countries in famine.

  • rate this
    0

    Comment number 323.

    Well, the median net income of a UK household is £393 a week, which comes to £19650 a year assuming you work 50 weeks a year.

    Source: National Equality Panel, 2010, An Anatomy of Economic Inequality in the UK

  • rate this
    +11

    Comment number 322.

    I used to earn 70k/year, now I earn 10k/year, my partner also endured a 10k/year paycut. When we earned a lot of money, we paid down our mortgage and bought a retirement flat for my mum.Now we earn much less, but we still have everything we need because we live carefully- 2 cars, a holiday, new household items as needed and we still save plenty. Its not what you earn its how you spend and save.

  • rate this
    -4

    Comment number 321.

    Modus Operandum for the Tories, rich get richer while the rest of us get squeezed out. Middle England voting Tory is very much Turkeys voting for Christmas, they're the ones getting shafted. 1 Tory MP in Scotland, a Prime Minister that 64% of the country never voted for...Yay democracy. Bring on Independence.

  • rate this
    -5

    Comment number 320.

    If you can’t afford children don’t have them, we’ve already got too many people.
    I paid tax for other peoples children all my working life, which was most irritating, and then when some overtime was available it was given to the workers with families “because they have to raise children”.

    Any report from a charity is, by definition, special pleading.

  • rate this
    +3

    Comment number 319.

    @308 it is difficult to have less children if your income reduces when you lose a good job.

  • rate this
    +12

    Comment number 318.

    I did everything the 'right' way, well at school, good career, put money by for a child, bought my house-all very comfortable 1 holiday a year existence.Then recession hits and it doesn't matter if you're earning £7k at that point or £250k, you will have been living to your earnings so everyone loses out. How much you need to survive depends on your outgoings you already had.

  • rate this
    +4

    Comment number 317.

    same street

    single mum ,never worked, 5 kids,gets combined benefits of over 30 grand

    me ,wife both working 4 kids combined income of 28grand

    i feel like a fool

  • rate this
    +1

    Comment number 316.

    Just wait until the 0.5% interest rate goes up and everyones mortgage with it, this is a picnic for most families compared to how bad it will get then. Imagine your mortgage plus a few percent extra on top then re-calculate. OUCH!!!

    House prices and shop rents influence alot of costs and the sooner these come down the better for everyone (except greedy landlords!)

  • rate this
    0

    Comment number 315.

    The figure of £36,800 masks huge variation around the country. The average male income in the City of London in 2010 was £97,000. The amount a family needs to live on is much higher in some parts of the country such as the South East than in others. These maps show the variation of income throughout Britain.

  • rate this
    0

    Comment number 314.

    Is this £36,800 a year gross or net?

  • rate this
    -1

    Comment number 313.

    Sue and jail the bankers who are responsible for the current financial crisis like Iceland did. http://www.google.com/hostednews/afp/article/ALeqM5hkg5VhwETJHWaiIqxwwj_PsHQ2Dg

    Cut benefits for the unemployed but have a better gradient system that makes it more beneficial for them to get a job.

    Increase tax on saturated fats, alcohol, tobacco and goods that increase costs for the NHS.

  • rate this
    +2

    Comment number 312.

    How many people who commented on here are doing so on their 'socially acceptable' iPads, iPhones and other expensive computer technology. I suspect this whole forum is biased as those in true poverty wouldn't even have the means to comment!

    I accept I am lucky to one able to afford to comment and I will gladly pay tax to feed those who can't afford it, as long as it's not used to buy holidays!

  • rate this
    -2

    Comment number 311.

    I wouldn't settle for anything less than 50K a week if its good enough for Bob Diamond its good enough for me!

  • rate this
    +4

    Comment number 310.

    I really cannot get my head around a "socially acceptable standard of living". Socially acceptable to whom?

  • rate this
    +6

    Comment number 309.

    258.Killer Boots Man
    "Some people on here want us to exist instead of living. We work hard and are belittled for wanting a TV, smartphone, Internet etc."

    you're taking it out of context, no one is belittling anyone for wanting these things, only for demanding them as a right, remember the conversation is about 'minimum acceptable'

 

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