Report confirms things are getting worse for those most at risk
On the 5th July the influential Joseph Rowntree Foundation published its annual review of what people believe is the minimum income needed to achieve a socially acceptable standard of living, and comparing this with the previous year’s figures. The figures give a revelling look into both what members of the public believe is a suitable minimum income and the government’s own figures. The key point of this years report are:
- A single person needs to earn at least £15,000 a year before tax in 2011, to afford a minimum acceptable standard of living. A couple with a single earner and two children need at least £31,600
- Inflation raised minimum household budget costs by around 5 per cent in the year to April 2011, slightly faster than the Government’s main inflation measure, the Consumer Prices Index (CPI). Over the past decade, the cost of a ‘minimum’ basket of goods and services has risen by 43 per cent, compared with 27 per cent for CPI.
- Out-of-work benefits remain well below people’s requirement for a minimum living standard, but pensioners claiming Pension Credit have incomes close to their minimum needs. Over the past three years, benefit levels have deteriorated relative to the income required to meet people’s minimum needs.
- The rise in personal tax allowances in April 2011 means that for a single person to afford the minimum, the wages required have increased by less than inflation.
- For families with children, by contrast, the earnings required to make ends meet have risen much faster than living costs, because Child Benefit has been frozen and tax credits reduced for many families. Most importantly, tax credits helping low-income families to cover childcare costs have been cut. Typically, families requiring childcare would have to earn over 20 per cent more in 2011 than in 2010 to meet the shortfall.
The report concludes that the combination of stagnant incomes and rising are affecting people’s income dramatically. Those at most risk are people in receipt of benefits with children. These families have been hit with the additional freeze on child benefit and reduced tax credits. These factors could seriously de-rail any attempt of the government to deal with the ever-increasing problem of child poverty, but also may have an impact on long term health of the children and the additional health costs incurred.
In an example a single person receiving just the basic unemployment benefit of between £53.45 and 67.50. With the well above inflation rises in fuel and food this puts a potential impossible strain of their finances, risking debt and the possible hopeless spiral into homelessness. The future looks indeed bleak for those in most need of help.
Summary of report HERE
Full report HERE
Benefits: READ HERE
