The latest report in the Households below a Minimum Income Standard series, looking back over the ten year period from 2008/9 to 2018/19, is published today. The analysis, funded by JRF, looks at what has happened to the adequacy of incomes, measured by individuals’ ability to reach the Minimum Income Standard (MIS). Although there have been improvements in average household incomes at points over the last decade, in the past two years income growth has stalled and incomes have fallen for some. In tandem with rising costs and a continued freeze in working-age benefits (both in and out of work), this has resulted in an increase in the number of households below MIS for the first time since 2013/14. This means that the number below MIS remains higher than a decade ago for every group included in this analysis.
In 2018/19, three in ten (29.9%) of all individuals in the UK were living in households with incomes below MIS, compared to 26.8% in 2008/09. This means that they do not have the income needed to cover the goods and services the public think are needed for a minimum socially acceptable standard of living – that is one that meets material needs, but also recognises the importance of being able to participate in society.
The proportion of individuals with a household income below MIS varies across demographic groups: 42.3% of children, 29.1% of working-age adults, and 18.2% of pensioners are below this threshold, a substantial increase since 2008/09. More than two thirds of children (67.7%) living with a lone parent were below MIS in 2018/19, while just over a third of children (35.1%) living in couple parent families were below this level.
One of the clearest trends over the last decade is the growing number of households where all adults are in work but they are still falling short of the income they require to meet their minimum needs - one fifth of working-age households below MIS (21.1%) are those where all adults are in full-time work.
This report does not cover the period affected by the COVID-19 pandemic, but in future years this series will continue to update and present this analysis of income adequacy as we enter what will undoubtedly be an enormously challenging period for a great many households.