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High rents plunge more households below minimum income standard (28 January 2014)

Date: 28/01/2014
Duncan Lewis, Legal News Solicitors, High rents plunge more households below minimum income standard

New research from the Joseph Rowntree Foundation has revealed that the number of households without sufficient income to give them an adequate standard of living has risen by one-fifth in three years.

A further 900,000 households have fallen below the minimum earnings level needed to sustain a decent standard of life, researchers at the Centre for Research in Social Policy (CRSP) at Loughborough University found – bringing the number of households living in poverty to 4.7 million, compared with 3.8 million in 2008-2009.

Income inadequacy is measured according to public opinion of what the basic requirement is for a decent standard of living (called the minimum income standard or MIS).

The researchers found that parents with young children and single parents were especially likely to be living below the MIS.

The researchers also found that those under the age of 35 who are working and living alone are also more likely to be living below the minimum income standard. The study found that 480,000 people aged below 35 and living alone could not afford an acceptable standard of living in 2011-2012 – an increase of 29% (310,000) compared with 2008-2009.

Nearly one million pensioners (800,000) were affected by MIS in 2011-2012 – an increase from 650,000 compared with 2008-2009 MIS levels among pensioners.

Factors which may be contributing to the increase in the number of households suffering from an increasingly poor quality of life may include higher levels of unemployment in the UK – as well as high rents as a result of a housing shortage and more investors entering the UK property market as buy-to-let purchasers.

The research indicates how the banking crash and subsequent credit crunch and economic downturn have affected different sections of the community in the UK.

Low interest rates have affected the value of pensions for many retired households – while young adults have struggled to find employment or get on the housing ladder. Even working married couples without children are struggling according to the figures, with 1.1m childless couples struggling to afford a decent standard of living despite both partners working – an increase of 10% since 2008-2009.

Katie Schmuecker – policy and research manager at the Joseph Rowntree Foundation – said:

“In the early part of the recession, families with children were protected by increases in tax credits. But a turning point was reached in 2011, when major cuts in support for childcare costs contributed to an increase in the risk of being below MIS.

“In the case of lone parents, the increase was from 60 to 67% between 2010- 2011 and 2011-2012 – in one year alone.

“Families who have seen their income shrink in a downturn will want to see improvements in the upturn – and it is up to the parties to offer much-needed help.”

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