Updated research published by the Joseph Rowntree Foundation (JRF) has shown that it is getting harder for people on low incomes to meet a minimum standard of living.
The Minimum Income Standard (MIS) shows how much various households need in 2010 to reach a minimum acceptable standard of living, according to sample groups comprising members of the public.
The research found that a yearly salary of £14,400 is the minimum a single person needs to achieve an acceptable standard of living; a couple with two children require a MIS of £26,900, far exceeding the adult national minimum wage of £5.80 per hour (equivalent to £10,556 for a single person).
Things people think should go in to a minimum budget, in addition to meeting physical needs such as food, warmth and shelter, are things that allow them to participate in society.
Some ‘essentials’ that working age people need include a computer and home internet access, as well as other things that are an integral part of modern life: a mobile phone, socialising and at least one week’s holiday.
A minimum income standard for the UK in 2010 shows that people on low incomes face a much higher inflation rate than that shown in the official Consumer Prices Index, which the Budget announced as the future basis for uprating benefits. Government figures suggest that about 30 per cent of workers in the UK are paid less than £14,820.
In 2010, basic out of work benefits provide less than half of a minimum income for an adult with no children and about two-thirds for families with children.
The safety net benefit for pensioners, Pension Credit, pays just enough for them to meet the MIS, provided they claim this means-tested benefit. The percentage of MIS provided by benefits fell for these groups (by 1-3 per cent), partly because benefit rises of around 2 per cent were less than the inflation rate.
For people in work, the gap between the minimum wage and the wages needed for a minimum household budget has widened too.
However, the JRF research shows that, despite the recession, members of the public have not been willing to cut back on what they consider necessities, indicating the public may not be as happy about reducing their standard of living as the government might have hoped.
David Furness of the independent think tank, the Social Market Foundation, said:
“I don’t think the public are at all prepared for what is to come. The public still seems to think we can make the necessary cuts through improving the efficiency of our public services. But the reality is, the standard of public services will drop - and living standards could drop as a result, too. If we’re going to rebalance the economy, we can expect some very big shocks.”