1 Jul 2015
Gap widens between income and the cost of living, new research reveals
New research from Loughborough University published today (1 July) reveals that the gap between people’s incomes and the amount they need to cover their essential costs has widened dramatically since 2008.
This is despite the fact that the cost of a decent standard of living, as defined by the public, has stopped rising for the first time since the recession began.
A Minimum Income Standard (MIS) for the UK, funded by the Joseph Rowntree Foundation (JRF), is calculated annually by Loughborough University’s Centre for Research in Social Policy (CRSP). It is an annual living standards benchmark which provides a barometer of what has happened to living standards for low income families since the downturn and during the recovery.
This year’s analysis finds that for the first time since 2008, the amount families need to earn to reach a minimum, socially acceptable standard of living has fallen.
Low and negative inflation in 2015 has meant the cost of what you need to meet the MIS remained the same. Additional factors have also helped to narrow the gap between earnings and outgoings for many low income households in the last year, bringing welcome respite. These include:
- An increase in the personal tax allowance
- Uprating of out-of-work benefits by 1%
- Slightly above inflation increases to child benefit and tax credits.