Why low-income families won’t ever be able to make ends meet

Low-income families can’t function financially. That’s the conclusion of a new report from the Joseph Rowntree Foundation, which shows that those with small wage packets are considerably worse off than they were 10 years ago.

In fact, they would need a third more disposable income to make ends meet, despite tightening their belts and shopping around for the best deals. 

And the measure isn’t some arbitrary percentage of average incomes either. It’s a barometer of living standards in the UK based on what the public believes is necessary to achieve a decent minimum living standard.

That minimum income standard (MIS) means being above the poverty line and able to afford healthy food, a low-cost UK holiday and some after-school activities for children, among other things.

The worrying truth is that low-income households are further away from achieving that than they were in 2008. Back then, a lone parent working full-time on the minimum wage, helped by tax credits, had annual disposable income just £520 a year (3.5 per cent) short of MIS. But today they are £3,640 a year short (20 per cent). 

A couple who both work full-time on the minimum wage and have two children are about £2,600 a year short of the MIS and a single breadwinner family are £6,240 short. It’s a stark change in living standards for people in low-income households.

“The past decade has been particularly difficult for families on low incomes as costs have risen faster than the Consumer Prices Index, while the support they get from the state to help cover these costs has risen more slowly,” Professor Donald Hirsch, director of the Centre for Research and Social Policy, says.

For people struggling on low incomes, the brutal truth may be that they simply cannot afford a minimum standard of living until and unless there is some change to benefits or affordability. But these increasing costs also reverberate up the income brackets, leaving many additional people struggling to manage even if their situation is not as desperate as those on the lowest incomes.

But why and how?


In the last decade, public transport has become more expensive, while the cheapest option – bus travel – has been cut. That means for households on the lowest budgets, transport costs can easily take up a fifth of their income.

Even when bus travel is available, it’s now 65 per cent more expensive than it was in 2008 and the public says you have to be prepared to travel further for work and even use taxis more when public transport is no longer an option.

At the start of this year, average rail fares rose by 3.4 per cent across the UK. Some of the most popular commuter train routes into London now cost almost £10,000 a year, meaning that even the wealthy could start to feel priced out.

Christians Against Poverty commented: “Our clients’ average income is far below the recommended minimum income standards and we recognise the struggle to pay for transport especially.” The organisation expressed concerns that some people were forced to skip meals in order to pay for transport to the Jobcentre.


The JRF study showed that on average the cost of food rose by just over a quarter between 2008 and 2018, while a minimum food budget for a single person rose from £29 to £44 a week, a rise of just over 50 per cent.

Food inflation is often more volatile than standard measures of inflation and some reports suggest it currently far exceeds the official inflation figure. 

The British Retail Consortium – KPMG’s retail sales monitor – showed that in the three months to January this year, food sales had increased by 4.1 per cent, with chief executive Helen Dickinson suggesting this was being fuelled by rising food prices.

A recent poll commissioned by The Independent revealed that one in 14 British people has had to use a food bank, almost four million adults.

Energy bills

The latest study shows that energy bills are more than 40 per cent higher than they were a decade ago, even though the internet makes it easier to shop around for a better deal.

However, the situation is poised to get worse for struggling families. The average fuel poverty gap – the measure of households’ energy bills and what they can afford to pay – is forecast to expand by 9 per cent this year.

The Department for Business, Energy and Industrial Strategy predicts that rising fuel prices mean the average gap for households in fuel poverty will increase to £357, up from £326 in 2016.


Many adults cannot get out to work without childcare provision but the cost of securing good quality care has rocketed. The JRF research shows that the average price of a full-time nursery placement is now £229 a week, a rise of 50 per cent in 10 years alone.

A recent study published by the Family and Childcare Trust reported that many families face difficult decisions when working out if it is affordable for both parents to return to work after having children.

It highlighted that the average cost of a part-time nursery place for a child under two has soared by 7 per cent in the last year alone to £122 a week, or more than £6,300 a year.

Ellen Broome, chief executive at the Family and Childcare Trust, said: “Childcare is as vital as the rails and roads, it supports parents to work, boosts children’s outcomes and provides our economy with a reliable workforce. Too many parents remain locked out of work by high childcare costs and low availability.”


In one vital area there was some good news; people are spending less on technology but are more connected than they were 10 years ago, according to the Centre for Research in Social Policy.

Broadband, a basic laptop and smartphone cost £8 a week today for a single, working-age person, compared with the £9.50 they would have spent on a landline and pay-as-you-go phone in 2008. That’s an even greater saving when inflation at 25 per cent is factored in.

And that more affordable access to technology means consumers can shop around more easily and access better deals. Unfortunately, when prices have risen so much faster than incomes for so many people, a mad scramble for the best prices doesn’t mean that a minimum standard of living is affordable.


Clearly wearing an extra jumper indoors and sharing babysitting duties with friends isn’t enough to address this dramatic drop in affordable living standards. 

Campbell Robb, chief executive of the 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. 

“This would ease the constraints the crippling cost of living places on their ability to build a better life and ensure everyone can reach a decent standard of living.”


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