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£14,400 needed for minimum standard of living

£14,400 needed for minimum standard of living

Category: Money

Updated: 06/07/2010
First Published: 06/07/2010

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
It is getting harder for people on low incomes to achieve a minimum standard of living.

The effects of rising inflation mean that a single person now needs to earn at least £14,400 to work with a minimum household budget, up from £13,400 two years ago, research conducted by the Joseph Rowntree Foundation has found.

This includes things people need in order to participate in society, as well as essentials such as food and drink, and a place to live.

A couple with two children are currently faced with having to pull in £29,200 a year to meet a minimum standard of living. Two years ago, the same family would have needed to earn £26,900.

In the past year, the annual earnings needed to keep up with the minimum income standard have risen by over £1,600, an increase of 6%, for a couple with two children, far outpacing the rate at which wages have climbed.

A freeze in personal tax allowances has put further pressure on families.

The research also found:

• The cost of a minimum budget is estimated to have risen by 38% in the past ten years, due to steep rises in the price of food (up 37%), bus fares (up 59%), council tax (up 67%) and some other essentials.

• A computer and an internet connection are now cited as necessary for all working-age households - a change from 2008 when they were only needed in households with school-age children. It is still not deemed necessary for pensioner households to have internet access (based on the views of pensioners themselves).

• Despite the recession, members of the public have not cut back on what they think is required for a minimum standard of living - they continue to believe that alongside physical essentials (food, warmth, shelter) people also need things which allow them to participate at an acceptable level in society (such as transport, social and cultural activities, and one week's holiday a year in the UK).

"This research shows what ordinary members of the public think is needed, not just to survive, but to take part in society. It provides powerful evidence for the new government to use as they develop policies to deal with poverty," said Julia Unwin, chief executive of the Joseph Rowntree Foundation.

"If they are serious about protecting people in poverty, then clear, in-depth assessments of the cutbacks and their impact will need to be set out, along with realistic long-term plans for meeting their goals."

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