Working families struggling - study

WORKING families with children are facing bigger shortfalls in their household budgets this year, despite an increase in the National Living Wage and tax cuts, according to the Centre for Research in Social Policy at Loughborough University.

A return to inflation combined with a freeze in working benefits has caused the shortfall to increase for all lowincome families with children over the past year. Single breadwinner and lone parent families are feeling the pinch the most.

The Minimum Income Standard (MIS) update, carried out for the Joseph Rowntree Foundation, acts as a barometer of living standards for households on low incomes. It is based on what members of the public think people need to achieve a decent living standard; it is updated according to economic and policy changes.

A single person now needs to earn £17,900 a year to reach MIS; a dualearner couple with two children need to earn £20,400 each; and a lone parent with a pre-school child must earn £25,900.

The research reveals that despite the National Living Wage rising from £7.20 to £7.50 and tax cuts, the gains are offset by rising living costs, the freeze on tax credits and benefits, and wage increases being clawed back through reduced in-work benefits.

Campbell Robb, chief executive of the Joseph Rowntree Foundation (JRF), said: “Working families are facing bigger holes in their budgets worth hundreds of pounds, despite a higher National Living Wage and tax cuts.

“It means millions of families are facing a struggle to make ends meet as the cost of getting by in modern Britain rises ever higher.

“Struggling families tell us as well as juggling the bills, it’s things like after school clubs and swimming lessons that must be sacrificed to cover the essentials.”