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:

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

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  • 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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  • Comment number 468.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this
    +3

    Comment number 467.

    442.Mayna

    And therein lies the real issue behind all of this - the inabilty to care about the difference between illegal, immoral, and unethical.

    The only difference between a drugs baron and a corporate tax dodger is one defined by the law - both are too interested in wealth to care about their impact upon society.

  • rate this
    0

    Comment number 466.

    Many struggle but a tiny minority make more money then they ever need or deserve. The majority subsidise the greedy few; only today M&S is paying off erstwhile retail geniuses for failure.The government must strive to achieve the best overall climate for economic prosperity and social cohesion. Hollande seems to have the right idea. We hesitate incase the bandits emigrate-that would be a bonus.

  • rate this
    0

    Comment number 465.

    "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."
    In the land of the Bentley yacht plane & several homes dotted around the globe the man with a 5 year old hatchback autogyro package holiday and 2up 2 down is a pauper.
    Come to think of it I would live like a king as a pauper!
    Where do I sign up for this?

  • rate this
    +1

    Comment number 464.

    435. Ray
    Re my #423.
    There must be two broadcasting organisations called the BBC.
    The one I use had an article about reports on supposed spending requirements for an “average family”. As I said.

    Your BBC must have contained a report on solutions to economic conditions.
    Which explains the confusion.

  • rate this
    0

    Comment number 463.

    452.Stueyg

    Thanks, I'm glad someone sees that the "rich" like the rest of us are just paying what is asked of them, it's not their fault if the tax system is broken & needs changed.
    We all pay the least tax we can, its human nature.

  • rate this
    0

    Comment number 462.

    I have a good job. It might get even better in a few months. I can afford children. What I can't afford are these useless government leading our country down the drain and allowing others to do so as well.

  • rate this
    -2

    Comment number 461.

    I am a widower and two years ago had a pay cut from £43,000 to £32,000- but was able to pay off my debts and live far more comfortably. Now I am 65 and still working- including deferred amounts I am now a poor pensioner on £58,000. The wheel goes around and around- it all depends on circumstances: studies like these are just seeking headlines, and getting them from the BBC.

  • rate this
    +1

    Comment number 460.

    "436. Bill: To be at all useful they should have worked out a 'subsistence level' instead."

    That's the sort of aiming high this government approves off. Let's see how low we can push everyone whilst we skim the cream off. Hint to those living on that cream right now - there's none left at the bottom, and we'll be 'aving a bit of your cream by any means necessary if things don't improve.

  • rate this
    +3

    Comment number 459.

    #433 yet another person having a go at tax avoidance.

    Have you ever ordered a CD on line and received it from Jersey? If so you too are a tax avoider.

    Maybe you took a ferry to France and bought cheap booze there - again you are a tax avoider.

    Putting money in offshore accounts is not tax avoidance, if you do not declare the interest on your tax return it is tax evasion or fraud

  • rate this
    +2

    Comment number 458.

    Many costs come down to supply and demand. Increase the amount people have without addressing these and all that you do is increase prices (hence the ludicrous house prices, child care costs, etc). Its not more money that is required, rather a major effort to reduce costs through increased supply.

  • rate this
    +2

    Comment number 457.

    442.Mayna
    ...If their is a fault in the tax system the fault is in the tax system not someone paying what is asked of them by that system

    If it was the system Jimmy Carr (and 1,000s of others) used to evade paying the taxes he should have been paying, then yes it needs to be sorted out. Tax loopholes need to be closed, but the govt won't do this because the rich bankroll their party funds.

  • rate this
    +2

    Comment number 456.

    someof the comments here are pathetic - basically, if we're not buying value/smart price/basics we're some sort of city millionaire or Lord? The notion of saving to buy somehting has gone out the window. as soon as one spends they're no longer 'one of us'
    Everyone has swiftly forgotten about the wealthy, who are laughing at our bickering over who has less or who does more with less

  • rate this
    +1

    Comment number 455.

    For everyone. I note that there are not many people on here saying that they would take a pay cut to have this amount of money, which, apparently, is all luxury living. Funny that. Any right wingers care to comment.

  • rate this
    -1

    Comment number 454.

    In 2002 to 2007 I got by on a little over £4k per year. I was a student and this is not unusual.

  • rate this
    0

    Comment number 453.

    I understand & sympathise with most commentators but don't forget that the 'luxuries' eg going to the pub, buying clothes etc are just as important for our economy as paying off your credit card. If the Gov had reduced taxes and given the public more disposable income the high street wouldn't be dying and we wouldn't have such high unemployment. We shouldn't just be 'earning enough to survive'.

  • rate this
    +2

    Comment number 452.

    442 Mayna
    Well said.

    Whilst I'm not fortunate enough to be in a bracket wealthy enough to afford or even justify a clever accountant, it is HMRC who decide what is and isn't legal - tax avoidance is perfectly legal and is written in statute. If we were all wealthy enough for an accountant, hands up who wouldn't? I'm damned sure I would!

  • rate this
    +2

    Comment number 451.

    £36,800?! What utter rubbish. This is an insult to people who really are poor.

  • rate this
    +3

    Comment number 450.

    Very much depends on where you live and how much your mortgage/rent is. I pay £1200 a month on the mortgage for my 3 bedroom home (with 5 people in it). Yes, I could leave my job and move North to a cheaper larger property and pay a third of that, saving about 9K a year. Other people get council houses and pay little rent, while others get housing benefit. It's relative to where you are.

  • rate this
    0

    Comment number 449.

    Absolutely possible at much, much less that they are suggesting. Been there, done that, still alive and well. Not surprised to see the usual "try living in London" types on here. £300pw for rent?! Another typical of example of the difficulty people have differentiating between their needs and their wants. If you need to you can find somewhere a little further out for £70/w and commute.

 

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