Millions of families unable to afford a decent standard of living with the figure expected to rise over the next three years
Millions of people in the UK are not earning enough to give themselves an adequate standard of living, according to new research by Loughborough University's Centre for Research in Social Policy.
A study which monitors the number of people living below the Minimum Income Standard (MIS) threshold has found that despite a rise in employment over the last few years, millions of families are unable to afford an minimum standard of living.
An MIS calculator is available online so people can check their own family's standing.
The MIS threshold is different to the poverty line – it is set by Loughborough University's Centre for Research in Social Policy and reflects the amount of income needed to maintain a decent life, based on the Centre’s research consulting members of the public about what such a minimum entails in the UK today.
“It is not the level of income a family needs to ‘survive’,” said Professor Donald Hirsch, co-author of the study. “It’s what you need to have, financially, to give yourself the opportunities and choices to be able to participate in society – so you’re not just living hand-to-mouth you’re able to have reasonable amount of leisure, eat well and you’re able to dress in a decent way.”
Researchers examined data from the Family Resource Survey, and compared household incomes, and found that some 19 million people – 60% of whom were working – fell below this threshold.
The figure is based on information gathered between 2008 and 2015, and saw an increase of four million people (a 25% rise) during that period - this is despite employment levels rising to a record high since the financial crash in 2008.
Prof Hirsch, Matt Padley and Dr Laura Valadez compiled the data in a report written for the Joseph Rowntree Foundation – an organisation which battles the causes of poverty.
Matt, Research Fellow at Loughborough, said: “Our report has shown a steady growth in the numbers of people with too little income.
“Unfortunately the conditions to the end of the decade still look unfavourable for these groups.
“With forecasts of rising inflation, slowing wage growth combined with cuts to tax credits, the outlook is set to be highly challenging for families whose low incomes mean they are, at best, only just managing to make ends meet.”
The report said that those in work often lack stable earnings at a level sufficient to reach MIS – which has had an impact of a variety of categories of working families.
For example, said Prof Hirsch, a lone parent who works full-time had a 28% chance of being below MIS in 2008/09, but this rose to 42% in 2014/15.
Looking to the future, the team said that between now and 2020, some of the same influences responsible for increasing the number of people living below MIS could cause more men, women and children to fall below the threshold.
They reported that due to the return of inflation, coupled with a rise in the cost of everyday living, for example food, annual household budgets would rise faster than wage increases.
The study says that a higher National Living Wage could help people on low wages, but the benefit will be felt by single people rather than low-income families who rely on tax credits or Universal Credit.
Campbell Robb, chief executive at the Joseph Rowntree Foundation, said: “For a truly shared society, everyone should have the chance to live a decent and secure life.
“These stark figures show just how precarious life can be for many families. Government focus on people on modest incomes is welcome, but it cannot be at the expense of those at the poorest end of the income scale: it must remember just about managing today can become poverty tomorrow.
“This could be a very difficult time for just managing families as rising inflation begins to bite into finely-balanced budgets.
“The high cost of living has already helped push four million more people below an adequate income, and if the cost of essentials such as food, energy and housing rise further, we need to take action to ease the strain.
“The Government can help in next month’s Budget by allowing families to keep more of their earnings and ensuring benefits and tax credits keep up with the rising cost of living.”
For more information about the Minimum Income Standard (MIS), visit: www.lboro.ac.uk/research/crsp/mis/
Notes for editors
Press release reference number: 17/23
Loughborough University is equipped with a live in-house broadcast unit via the Globelynx network. To arrange an interview with one of our experts please contact the press office on 01509 223491. Bookings can be made online via www.globelynx.com
Loughborough is one of the country’s leading universities, with an international reputation for research that matters, excellence in teaching, strong links with industry, and unrivalled achievement in sport and its underpinning academic disciplines.
It has been awarded five stars in the independent QS Stars university rating scheme, putting it among the best universities in the world, and was named the best in the country for its student experience in the 2016 THE Student Experience Survey. Loughborough was ranked 4th in the Guardian University League Table 2017 and 7th in The UK Complete University Guide 2017 and was also named Sports University of the Year by The Times and Sunday Times Good University Guide 2017, and University of the Year in the What Uni Student Choice Awards 2015.
Loughborough is consistently ranked in the top twenty of UK universities in the Times Higher Education’s ‘table of tables’ and is in the top 10 in England for research intensity. In recognition of its contribution to the sector, Loughborough has been awarded seven Queen's Anniversary Prizes.
In September 2015 the University opened an additional academic campus in London’s new innovation quarter. Loughborough University London, based on the Queen Elizabeth Olympic Park, offers postgraduate and executive-level education, as well as research and enterprise opportunities.