Soaring costs could strip ‘basic dignity’ from millions in UK

Soaring costs could strip ‘basic dignity’ from millions in UK

Annual income survey finds national minimum wage will often fail to cover even a ‘no frills’ lifestyle

Clothing shop facade and shopper

Soaring inflation and energy costs will leave millions of people on low incomes thousands of pounds short of what the public say is the minimum amount needed to live with basic dignity in the UK this winter, according to an annual survey.

The annual Minimum Income Standard study is based on intensive deliberations by groups of socially representative UK residents, who agreed what a normal, no-frills lifestyle would cost and look like in 2022, taking into account housing, food, clothing, household goods, transport and social participation.

It reveals that even factoring in the government’s existing cost of living support package, a single adult without children working full-time on the national minimum wage will make nearly £7,000 less than the £25,500 they would need on an annual basis to fund a basic decent standard of living.

A couple working full-time on the national minimum wage who have two young children will make £6,200 less than the income standard of level of £43,400 needed to reach the basic living standard for a household of their size and composition.

Amount needed each week to reach minimum standard of living (excluding rent and childcare) in 2022, and % increase on 2021.

The gap is even wider for households reliant on social security: a single working-age adult with no children would receive 32% of the minimum income needed for a decent standard of living, even after existing Treasury cost of living support. A single parent on benefits with two young children would get 54%.

Abigail Davis of Loughborough University, a co-author of the study, said: “As prices continue to rise well ahead of incomes, the reality is that more and more people are going to be focused on survival – keeping a roof over their heads, putting food on the table, and keeping their homes warm – and will fall well short of reaching this minimum living standard.”

Peter Matejic, head of analysis at the Joseph Rowntree Foundation, which publishes the annual survey, said: “In order to move us closer to a society where fewer people fall below the minimum income standard, the government must reform our social security system to ensure everyone can afford the essentials and, more broadly, what the public think is needed to live in dignity.”

Annual earnings required to reach minimum standard of living, working full time and paying for childcare

The minimum income standard, published since 2008, tracks the changing nature and costs of what the public agrees is needed for UK households to not only survive but eat healthily, afford a basic social life and play an active part in society, from family visits to children’s after school clubs.

The standard’s basket of goods and services includes the household cost of three meals a day, plus snacks and drinks. For clothing it includes casual and smart clothing, coats, shoes and sportswear. Housing is restricted to rented accommodation in either the private or social sector.

In 2022 the standard was uprated to reflect not just the soaring costs of food and energy but changing societal norms after the pandemic. Focus groups increased the amounts for social and leisure activities outside the home – and included a Netflix subscription as essential for domestic entertainment.

This year also brought a rise in the amount allocated for pocket money for secondary school-age children for the first time since 2008 – reflecting, the study said, the importance to the public “of young people being able to go and meet with friends after two years of not being able to socialise as easily with their peers”.

The shadow work and pensions secretary, Jonathan Ashworth, said: “This analysis is a stark reminder of the scale of crisis that has engulfed families in recent times, exacerbated by deep real terms cuts to universal credit and stagnant wages.”

A government spokesperson defended its cost of living support package and said “appropriate preparations” were being made to ensure that “any additional support or commitments on cost of living can be delivered as quickly as possible when the new prime minister is in place”.

They added: “We recognise people are struggling with rising prices which is why our £37bn of support will provide those on the lowest incomes with at least £1,200 in extra help, with the first £326 cost of living payment already issued to more than seven million households.”