UK living costs at least £14,400

7th July 2010  

Low earners are still struggling to achieve a minimum standard of living as costs continue to rise despite universal pressure on wages and benefits.

The highly influential Joseph Roundtree Foundation (JRF) has published its annual update on the public’s opinion on what people need to earn to achieve a socially acceptable standard of living.

Despite the recent harsh recession, the public involved in the research haven’t reduced what they consider to be life’s bare necessities. They still feel as a minimum people need not just physical essentials like shelter, warmth and food but also things that allow them to participate in Society, and to have a life.

JRF calculates that a UK family of two adults with two children needs an annual income of at least £29,200 to afford the basics of life. For a single person the minimum is £14,400 – equivalent to full-time job earning £7.38 an hour.

Inflation has caused the cost of a minimum household budget to rise by 3% to 4% in the year up to April 2010, in line with general inflation. However a new part of the JRF study shows that over the past ten years the rising cost of public transport, food, and other essentials means the minimum budget costs 38% more, despite general inflation running at just 23%.

Consequently a single person who in the year 2000 could afford a minimum basket of goods and services (but whose income had just risen by the official inflation rate) would be £19 a week short of being able to afford the same basket in 2010 – a net fall in their living standard of over 10%.

Interestingly a computer and home internet connection are now considered vital for all non-pensioner households, according to the groups involved in the study In 2008, they were only considered essential for families with school-age children. As early as 1999 JRF were predicting that those with lower incomes were going to be excluded from the rapidly growing ‘electronic economy’ where increasingly everything from utilities to credit cards were going to be sourced and compared online.

JRF calculated that a £1,000 rise in tax allowances from next year would help some low income families making them £320 a year better off (after inflation) if both partners worked.

But as it appears that the new Government’s plans to increase benefits only by the ‘Consumer Prices Index’ in future, as opposed to the higher ‘Retail Price Index’, those on benefits look set to become increasingly worse off in real terms.

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