Despite at least one adult working full time, millions of households continue to struggle to make ends meet.
Living standards have declined since 2008 despite the economy’s return to growth, the anti-poverty charity said and warned that families with children are at most risk of a life in poverty.
A report found that 2.6 million households, or 60{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} of those where the total income is below the charity’s minimum income standard, included at least one working adult.
About 600,000 households were living below the MIS – despite every adult being in full-time employment.
The MIS is determined by asking members of the public to define what is needed to “live to an adequate level”.
The threshold is as follows;
£16,850 for a single person
£25,600 for a lone parent with one child
£36,060 for a single breadwinner with two children.
Around 11.6 million people in the UK live below the MIS, the charity found.
In 2008, prior to the banking crisis, around 21{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} fell below that level.
Despite the gloomy assessment of the difficulties faced by working families, the charity welcomed a slowdown in the rate at which people are falling below a “decent living standard”.
The chance of having an income below MIS rose only marginally last year, and less than in previous years.
The number of people in childless households who lived below the MIS fell slightly, by about 400,000, reversing big increases between 2008 and 2013.
The charity expects the government’s national living wage of £7.20 per hour due to be introduced in April ,will deliver further improvements for those households with no children.
However, it did warn that the picture for households with children was looking bleaker. Those living in a family with children has seen their risk of falling below the MIS watermark increase by a third since the previous report, it said.
This means that 40{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} now live below the MIS – 2 million more than in 2008-09.
The foundation called on the chancellor, George Osborne, to address living standards in his next budget, due in mid-March, by giving businesses incentives to help employees into better-paid jobs.
It also called for action on affordable housing, childcare and the “high price of essentials”, to reduce the cost of living.
The group also recommended an increase in the current work allowance – part of the universal credit benefits system of the work and pensions secretary, Iain Duncan Smith – to make sure that work pays.
“It is good news that things have stopped getting worse overall, although there remain many more people living on low incomes than in 2008,” said Matt Padley, the author of the report from Loughborough University.
“What is more troubling is that for families, even with more work and slightly better pay, the risk of falling below the minimum has continued to rise.”
Source: Joseph Rowntree Foundation