Millions more on incomes too low to have acceptable living standards – study

Two million more people are on incomes considered too low to have an “acceptable” standard of living compared with 10 years ago, new research has found.

A study by Loughborough University suggested three quarters of lone parent families had earnings too low to meet their minimum needs – up by 65% since the financial crisis in 2008.

And the number of single women in their early 60s – a group affected by an increase to the state pension age – living below the minimum standard of living was found to have doubled in the last decade.

The University’s Centre for Research in Social Policy (CRSP) conducted the research as part of its Minimum Income Standards programme, which calculates the minimum budget individuals require to cover their material needs and to participate in society.

Its findings suggested that, compared to 2008, two in five women aged 60-64 who live alone have incomes too low to meet their minimum needs, up from one in five.

The total number of people with earnings below what is required to meet their minimum needs has risen from 16.5 million to 18.7 million – but has fallen since 2013 when it reached 20.4 million – researchers found.

But the study noted that some low-paid workers without children who do not rely on benefits have been helped by the National Living Wage.

Matt Padley, a research fellow with CRSP and co-author of the report, said some Government policies were to blame for the findings.

He said: “The fact that over a quarter of the population lack the income to reach the minimum that the general public considers you need for an acceptable living standard is not good news.

“This is in part explained by overall economic conditions, but we have also identified how particular government policies have made things better or worse for specific groups. So, some low-paid workers without children who do not rely on state support have gained significantly from the National Living Wage.

“On the other hand, we have identified how the raising of the women’s pension age has hit older women’s overall living standards: the additional amount that they work as a result has not produced sufficient income to replace the pensions they would have otherwise received.”

Professor Donald Hirsch, director of CRSP and co-author, added: “The trend for lone parents shows very clearly that moving more lone parents into work is not a guaranteed way of tackling family hardship. The main trend has been for these families to get part time jobs that still leave them short of what they need.

“Tax credits and Universal Credit were designed to supplement the income of such working families, but the value of this support has been seriously eroded over the past decade. The better pay rate being earned for those on the National Living Wage has helped, but not enough to offset these cuts.

“Only if more employment, better pay and sufficient public support for low income families were all aligned could children of lone parents no longer have to expect that they will face hardship when growing up.”

A Government spokeswoman said: “Since 2010, one million people have been lifted out of absolute poverty. With this Government’s policies, household incomes have never been higher, and income inequality has fallen.

“We recognise how challenging it can be to juggle work and family life. That’s why under Universal Credit, parents can claim up to 85% of their childcare costs back compared to 70% on the legacy benefit system.”