Millions of working families ‘struggle to make ends meet’, report says
Government urged to lift the freeze on working-age benefits and tax credits.
Millions of working families across the UK are facing bigger shortfalls in their household budgets this year, according to a revealing new report from the Joseph Rowntree Foundation (JRF).
The JRF’s latest annual report on living standards found that rising inflation, together with the freeze to working age benefits and tax credits, has left millions of working families with children struggling to make ends meet – with single breadwinner and lone-parent families hit the hardest.
According to the report, a single person now needs to earn £17,900 a year to reach a ‘Minimum Income Standard’ (MIS), while a couple with two children need to earn £20,400 each and a lone parent with a pre-school child needing to take home £25,900 a year.
The MIS update is carried out every year by the Centre for Research in Social Policy at Loughborough University, and is based on what the public believe people need to earn for a decent living standard.
Increases in the National Living Wage and tax cuts have been offset by rising living costs, the freeze on tax credits and benefits, and wages being taken back through cuts to in-work benefits.
Rebecca Bromley, a working mum with a nine-year-old son from Leeds, told researchers: “It’s very difficult. Day-to-day expenses are just about manageable but when other things pop up – like school trips or when they need new uniform – it’s always ‘where am I going to get this money from?’
“I can’t remember the last time I treated myself to anything, new shoes, new clothes, I just don’t get them.
“When Birthdays and Christmases come up, something which should be enjoyable is stressful because of the worry about finding the money.
“My wage only just about covers all my bills. By the end of the month, I’m lucky if I even have £50 left over.”
The JRF says that whilst most people will be better off when moved to Universal Credit, the majority will still face a substantial shortfall between what they take home in earnings and rising living costs.
Campbell Robb, JRF chief executive, said: “Working families are facing bigger holes in their budgets worth hundreds of pounds, despite a higher National Living Wage and tax cuts.
“It means millions of families are facing a struggle to make ends meet as the cost of getting by in modern Britain rises ever higher. Struggling families tell us as well as juggling the bills, it’s things like after school clubs and swimming lessons that must be sacrificed to cover the essentials.
“With the Bank of England forecasting inflation will increase even higher this year, families are facing no respite.
“We need the Government to take action and ensure living standards do not fall backwards. Lifting the freeze on working-age benefits and tax credits must be the start along with allowing people to keep more of their earnings.”
The report’s author Donald Hirsch added: “This year we have seen a return to inflation for the first time since the freeze in benefits and tax credits was introduced.
“It is clear from these results that this freeze is preventing better minimum wages from feeding through to improved family living standards.
“A particularly important feature of this is that for every extra pound earned, about 75p is typically lost by low earning families in additional tax and reduced tax credits or Universal Credit.
“Unless the amount that you can earn before these credits are withdrawn rises along with prices and earnings, it will be very difficult to deliver the improved living standards for struggling families that have been promised.”