Two in five families unable to afford a decent standard of living

A study by the New Economics Foundation think-tank suggests that 30 million people in the UK will be unable to afford a decent standard of living by the time the current parliament ends in 2024.

The report warns that rising prices, below-inflation increases in earnings and projected increases in unemployment would result in 43% of households lacking the resources to afford groceries, buy new clothes or treat themselves and their families. This marks a 12 percentage point increase since 2019. The NEF said that by 2024 almost 90% of single parents and 50% of workers with children would fall below a minimum income standard. The think-tank has called for universal credit to be scrapped and replaced by a national living income, a minimum below which no one could fall whether they were in or out of work.

The research uses the Minimum Income Standard (MIS), which is the UK’s leading approach to measuring living standards based on need and is used to calculate the​‘real’ Living Wage paid by companies like Ikea and KPMG, and football clubs like West Ham, Liverpool and Chelsea.

The analysis shows the 12.5 million families unable to afford the cost of living by December 2024 includes 88% of single parents and 50% of working families with children. The average shortfall for families falling short of a decent standard of living standard will have risen from £6,200 a year as of December 2019 to £10,000 by December 2024.

Sam Tims, economist at the New Economics Foundation, said “A decade of cuts, freezes, caps and haphazard migration between systems has left the UK with one of the weakest safety nets among developed countries. Millions of families were already living in avoidable deprivation and hardship but as we enter the greatest living standards crisis on modern records, the day-to-day experience of low-income families is set to become even more desperate.”

“We need a bold new way of providing income support that will help all people deal with the challenges presented by the fast-changing world we’re living in. A national Living Income would set an income floor that is enough to meet life’s essentials, which no one can fall below whether they are in or out of work.”