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Poorest need a third more income to meet cost of living

Low-income families need a third more disposable income than a decade ago in order to make ends meet, according to research from the Joseph Rowntree Foundation.

The rising costs of transport, childcare and energy are behind the squeeze on incomes, the foundation said, noting that transport costs take up nearly a fifth of minimum household budgets. Bus travel is 65 percent more expensive in 2018 than in 2008.

 

On average the cost of food rose by just over a quarter between 2008 and 2018, the charity found, but a minimum food budget for a single person rose from £29 to £44 a week, a rise of just over 50 percent.

 

The decade-long study found energy bills have risen 40 percent over the period, while childcare costs have also risen more than 50 percent, with the average price of a full-time nursery place for a two-year-old now standing at £229 a week.

 

The figures, based on the Minimum Income Standard (MIS) calculated by the Centre for Research in Social Policy at Loughborough University, show that working parents with children on low wages are further away from the MIS, despite a 41 percent increase in the National Minimum Wage.

 

Professor Donald Hirsch, Director of the Centre for Research and Social Policy noted that the past decade has been “particularly difficult” for families on low incomes, with costs having risen faster than the Consumer Prices Index (CPI), while the support they get from the state to help cover these costs has risen more slowly than CPI.

 

Campbell Robb, chief executive of the independent Joseph Rowntree Foundation, said: “These figures show just how precarious life can be for low income households. People who live below the minimum standard say that they shop around to get the best deals and juggle to pay the bills, but the soaring cost of transport, energy and childcare means millions of families are still locked in a daily struggle to make ends meet.

 

“Some working parents are actually further away from reaching a decent living standard because tax credits to top up low wages have been falling at a time when families need them most. The government must put things right by allowing families to keep more of their earnings.”

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