Low income homes 'still worse off'

Low income households have seen their living standards improve slightly this year for the first time since the recession – but they are still dramatically worse off than in 2008.

The findings come from the Joseph Rowntree Foundation's (JRF) annual study of the cost of living.

A team from Loughborough University calculated that in 2015 single people have to earn £17,100 before tax to maintain the minimum standards that are considered socially acceptable.

Couples with two children needed to be bringing in at least £20,000 each to obtain basic goods and services.

The figures have not risen since last year due to low and even negative inflation.

Meanwhile, the increase in the personal tax allowance to £10,600, minimum wage rise, and 1% boost to out-of-work benefits, child benefit and tax credits have improved people's situations.

But the study found single people on the minimum wage were still £52 a week short of the Minimum Income Standard (MIS).

Couples were £74 below the level. In 2008, when the MIS was calculated as £13,500, the shortfalls were £27 and £31 respectively.

Families reliant on safety net benefits were in worse positions, the report said. Couples with two children were £148 a week short of the mark in 2008, and £196 in 2015.

JRF chief executive Julia Unwin said: "After seven years of declining living standards, the pause in rising costs is a very welcome respite.

"But many low income households are still much worse off than in 2008, leaving them struggling to make ends meet and reliant on benefits to top up their incomes.

"A couple with two children who each earn the minimum wage face a shortfall of almost £4,000 a year between their incomes and what the public say they need for a minimum standard of living.

"We need to see action to raise wages, build more genuinely affordable homes and tackle the UK's low productivity to help people get on at work."

TUC general secretary Frances O'Grady said: "This report reveals the living standards crisis is far from over.

"Wages have fallen in real terms, with vital benefits reduced and public services scaled back. Too many of those in work cannot afford an acceptable standard of living.

"This research shows why Britain needs a pay rise not tax credit cuts. Unless we see stronger real wage increases and more decent jobs, the recovery will remain out of reach for many working families."