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
    +1

    Comment number 588.

    "Money does not equal happiness, though it can open open opportunities for happiness, but not happiness itself."

    Living comfortably within one's means is great no matter how much you earn, but sharp shifts in income can lead to serious problems which people are quite rightly not that optimistic about, like getting evicted.

  • rate this
    +1

    Comment number 587.

    "578.Rich

    @571 Ex Tory Voter... I think @567 has a point, rent can't be ignored and you can't "take it up with your landlord"."

    I didn't say the tenant should take it up wit the landlord, I said those who have a problem with high benefits need to address rents rather than pick on claimants, as rent is by far the biggest benefit cost. Only 1 in 8 on housing benefits are actually unemployed.

  • rate this
    +3

    Comment number 586.

    573.Mayna
    'No, but does wailing & gnashing of teeth when out of personal control make someone happy – I think not'

    You've descended to pure hyperbole there.

    'Some things we can change, others we can’t. There will always be folk with & folk without'

    Funny, I don't remember seeing that carved in stone anywhere. One of the functions of democracy is to allow us to question.

  • rate this
    0

    Comment number 585.

    580.Ex Tory Voter

    Not saying it is always easy, just that chasing the unattanable risks loosing sight of what we do have.

    577.Loony Liberal -
    ""All that is necessary for the triumph of evil is that good men do nothing."

    Agreed, but first we must also check that our actions will result in good not just salve our ego or morals.

    "First they came for..."
    but I am poor & speak such.

  • rate this
    +1

    Comment number 584.

    578.Rich

    That was the point of social housing (or council if you are old enough) to provide affordable accommodation for those with little income and no savings but it was all sold of and now we have expensive renting and house buying. As with all benefits the point isn't to stay in it for ever but for your income and savings to rise so as to move on Not possible in a low wage high cost economy

  • rate this
    +2

    Comment number 583.

    Money doesn't buy happiness, but it buys you the kind of problems you can afford!

  • rate this
    +2

    Comment number 582.

    "As i said i earn £16,500 and work my a** off so why should someone who does nothing get early £8,000 more than me??????"

    Small point: almost no one gets anywhere near £24K a year in benefits. £24K is the cap; the average will not be anywhere near that. Claiming JSA and housing benefit, I think mine worked out at about £6K, most of which was rent money.

  • rate this
    0

    Comment number 581.

    @573.Mayna

    Easily said when sitting in your own living room with your own front door. Tell that to the people that work/have worked and still don't have a place to call home (that's a life essential thing)!

  • rate this
    0

    Comment number 580.

    "573.Mayna"

    Fine words, but when the car is broken and the only way to get it fixed is a loan shark, it's very, very hard to remain positive all the time.

    I had a joint income of just under £100k 10 years ago. Despite some money worries, as a person I'm much happier now on far less. Money does not equal happiness, though it can open open opportunities for happiness, but not happiness itself.

  • rate this
    0

    Comment number 579.

    566. Stoketom
    10 MINUTES AGO

    It is not just benefits and low paid jobs, you need to get very high up the salary scale (top 10% maybe even top 5% of earners) before there is a significant change in standard of living when tax & benefits are taken into account.

  • rate this
    +1

    Comment number 578.

    @571 Ex Tory Voter... I think @567 has a point, rent can't be ignored and you can't "take it up with your landlord". If someone lives in social housing their rent is often significantly lower than someone who is a home owner / private renter who may have no choice as to how much they pay as all properties in their area are way above the £80 odd pound modelled on.

  • rate this
    +3

    Comment number 577.

    573.Mayna
    Be thankful we are not those without, aspire to be those with but always happy with what we have, else it becomes a life of frustration & envy.
    _____

    "All that is necessary for the triumph of evil is that good men do nothing."

    "First they came for the Communists, and I didn't speak out, because I wasn't a Communist."

    Not sure which quote I prefer. What's your favourite of the two?

  • rate this
    +2

    Comment number 576.

    Re 572. tc
    "Remember that word called thift???"

    Did you mean thrift or theft?

  • rate this
    -3

    Comment number 575.

    571.Ex Tory Voter
    Just now


    And sponge off other people? No thanks. Its everthing not just rent but i'm sure my landlord would say if i wasn't happy then i could move out. Brilliant then i would be homeless.

  • rate this
    -1

    Comment number 574.

    And you get gifted this amount by Social Services while hubby goes to fight for alShabab or the Taliban

  • rate this
    0

    Comment number 573.

    565.Ray
    "Does succeeding in being happy mean...?"

    No, but does wailing & gnashing of teeth when out of personal control make someone happy – I think not
    Some things we can change, others we can’t. There will always be folk with & folk without. Be thankful we are not those without, aspire to be those with but always happy with what we have, else it becomes a life of frustration & envy

  • rate this
    0

    Comment number 572.

    So......a car is necessity... a mobile phone...and 3 nights down the pub/betting office?? I've just been shopping ...spent £23...and got £11 reductions. Remember that word called thift???

  • rate this
    +4

    Comment number 571.

    "567.WhatsTheWorldComingToo

    As i said i earn £16,500 and work my a** off so why should someone who does nothing get early £8,000 more than me??????"

    One more time - they don't. They get £71.50 for them, plus whatever for kids. The rest is rent. If you have a problem with the amount for rent, take it up with the landlords. On your money you should be able to claim housing benefit and C. Tax.

  • rate this
    +1

    Comment number 570.

    £16383 for a single person ? That mean the majority of 16-25 year olds (about 75% of them) are earning less than acceptable?

    Next time there's a rant about lazy kids, consider this - They may have decided that, economically speaking, working a full week still doesn't pay for a house and food, so what's the point?

    Doesn't even factor in young, single parents either. Youth have been left to rot.

  • rate this
    +2

    Comment number 569.

    "One thing I've noticed from my love of history is how happy folks tried to be no matter their circumstance - poverty, serfdom, helotism - you name it."

    It's been shown that, once one's basic needs are met, money does not make one particularly happier. But financial security is definitely desirable, and it benefits the economy for more people to be comfortably well-off enough to splurge a bit.

 

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