Three in 10 people in the U.K. cannot afford a minimum standard of living – new report

Three in 10 people in the U.K. do not have the necessary income to achieve a socially acceptable standard of living, according to a new report.

The research from Loughborough University, published today, looks at 10 years of data about household incomes and minimum household budgets which show that 19.6 million people are unable to afford the goods and services required to participate fully in society.

The number lacking the income they need has risen from 16.2 million in that period (2008/09—2018/19).

The analysis looks at household incomes before the COVID-19 pandemic. In future years, this annual research will look at the impact of COVID-19 on household incomes and the number of people unable to afford all they need.

The Minimum Income Standard (MIS), produced by the Centre for Research in Social Policy at Loughborough University, provides an indicator of living standards in the U.K.

Funded by the Joseph Rowntree Foundation—an independent social change organization working to solve U.K. poverty—the analysis also found that the number of people with incomes below 75% of MIS had risen from 10.1 million in 2008/09 to 11.9 million in 2018/19.

Individuals below this level fall well short of being able to meet their minimum needs and are far more likely to be materially deprived—unable to afford essential goods and services, such as food or fuel.

In 2018/19 a quarter of all children (3.6 million) were living in homes with incomes below 75% of MIS—while 42.3% of children (5.9 million) were living in households which did not reach the minimum income standard.

Children living with a lone parent (67.7%) were nearly twice as likely to be growing up with incomes below MIS compared to those growing up in households with two parents (35.1%).

Matt Padley, one of the report’s co-authors, said: “This analysis has given us an opportunity to look back over the last decade and see what’s been happening to the numbers of people who are able to afford a minimum standard of living.

“This standard is one that includes food, clothes and shelter, but importantly is also about having what you need to be able to participate in society.

“There have been points over the last decade where things have improved for particular groups—the introduction of higher national minimum wages has undoubtedly helped some—but the number below MIS remains higher than a decade ago for every group explored here.

“Rising costs, and a continued freeze in working-age benefits (both in and out of work) in 2018/19 mean there’s been an increase in the proportion of individuals below MIS for the first time since 2013/14.

“Nearly one-in-five pensioners can’t afford this minimum living standard. And households with children are finding that work is not providing a route out of low income—two fifths (42.6%) of lone parents in full-time work are below MIS, 57.3% of single-earner couple parents (where one parent is in work and the other economically inactive) are below this level.

“In fact, one of the clearest trends over the last decade is the growing number of households where all adults are in work, but they are still falling short of the income they require to meet their minimum needs.

“Not enough has been done in recent years to address and increase low income, and to enable all individuals to reach a minimum socially acceptable standard of living.

“COVID-19 has highlighted the shortfalls in the existing social security system and has reinforced just how important an adequate and functioning safety net is.

“Without changes, many households will continue to live with a growing gap between what they have and what they need for a minimum standard of living.”

The Minimum Income Standard (MIS) provides a benchmark of income adequacy, rooted in that members of the public think is needed for a minimum socially acceptable standard of living.

This report looks at the proportion of people who fall below this level, and at those with incomes below 75% of MIS.

Individuals those incomes are below 75% of MIS face a greatly increased likelihood of deprivation compared with those whose incomes are above the MIS threshold.

This report looks at the ten-year period from 2008/09 to 2018/19, the most recent year for which household income data are available.