More than one in three families struggling to make ends meet

The report, ‘Households below a Minimum Income Standard 2008/09-2012/13’, indicates that at least 8.1 million parents and children in the UK are living on incomes below what is needed to cover a minimum household budget, up by more than a third from 5.9 million seven years ago.

It attributes this increase to a ‘real-term’ fall in wages and cuts to benefits and tax credits.

Commissioned by the Joseph Rowntree Foundation (JRF) and carried out by the Centre for Research in Social Policy at Loughborough University, the research is based upon data on household incomes.

The JRF defines a minimum standard of living in the UK as being able to afford food, clothes and shelter, along with having the opportunities and choices necessary to participate in society.

According to the charity, there has been a ‘widening gap ‘in income inadequacy since the recession and its aftermath, with lone parent and single breadwinner families most affected.

It estimates that around 2.3 million lone parents live on inadequate incomes, up from 2.2 million in 2008, while the number of single breadwinner families affected has risen from 1.6 million to 1.9 million.

The report also shows that childless working-age households are increasingly struggling to make ends meet, primarily because of worsening job prospects in the immediate aftermath of the recession.

To address this ‘widening gap’, the JRF is calling for changes to the design of Universal Credit so low-earners keep more of their wages before benefits are withdrawn.

It also wants National Minimum Wage rates to be set with regards to the changing cost of living and average earnings, for employers to pay the Living Wage where they can afford to, and essential good and services, including energy and transport, to be reformed so they provide good value for money.

Katie Schmuecker, policy and research manager at JRF, said, ‘Falling earnings, cuts to in- and out-of-work benefits and sharp rises in the cost of essential items over several years have taken their toll upon the ability of families with children to secure a decent living standard. Without action by the Government and employers to address this group as part of a wider anti-poverty strategy, this trend is likely to have serious consequences for the next generation.’

Anne Longfield, chief executive of 4Children, said, ‘At a time when wages are stagnating and benefit changes have left families on low incomes struggling, this report paints a bleak picture of everyday life for many families right across the country.

‘To make matters worse, we know that a significant number are resorting to borrowing just to cover the costs of essentials, entering into a cycle of debt from which it is difficult to escape.

‘To tackle the problem, we need to address the cost of childcare - a financial strain on family budgets which is pushing one in five parents to consider reducing hours, or giving up work altogether. Those on low incomes need to keep more of their wages as the new Universal Credit system is introduced, while unfreezing child benefit for parents with under-fives would be welcome help for those struggling to get by.

‘Offering extra support for these parents makes sense for families and for the economy – and should be top of the agenda for political parties as General Election campaigns get underway.’