Study warns millions of families ‘struggling to make ends meet’

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Almost two out of five families with children are struggling to make ends meet and do not have enough money for a socially acceptable standard of living, a new report claims today.

The York-based Joseph Rowntree Foundation estimates at least eight million parents and children are living on incomes below what is needed to cover a minimum household budget. It said there has been a widening gap in income “inadequacy” since the recession with lone parents and single breadwinner families facing particular pressure.

As many as 71 per cent of lone parents live on inadequate incomes, up from 65 per cent since the 2008/09 recession, the foundation added. Cuts to benefits and tax credits and a real-term fall in wages were behind the growing gap between the incomes of families with children and the income they need, it said.

The research group called for changes to Universal Credit, more employers to pay the Living Wage and reforms to make sure people on low incomes do not pay more for essential goods and services than better-off households.

Katie Schmuecker, the foundation’s policy and research manager, said: “Stagnant wages, cuts to in and out-of-work benefits and sharp rises in the cost of essential items over several years have taken their toll upon the ability of families with children to secure a decent living standard.

“Without action by the Government and employers to address this group as part of a wider anti-poverty strategy, this trend is likely to have serious consequences for the next generation.”

Report co-author Donald Hirsch claimed the research shows “just how much ground (those on the lowest incomes) need to make up in order to restore pre-recession living standards”, and added: “Nearly four in 10 families with children now have incomes that are not high enough to afford a minimum basket of essentials according to our research into what the general public define as adequate.”

Ex-Labour Minister Alan Milburn, chairman of the Social Mobility and Child Poverty Commission, said: “Despite very strong employment growth and record low worklessness, the number of people in families with children who are unable to attain what the public believe to be a minimum standard of living has increased by 2.2m – more than a third – since the start of the recession, with the majority of the increase in working households.”

Mike Kelly, head of Living Wage at KPMG, said childless working households are the worst affected by low pay – and their predicament is getting worse.

He said: “For far too long, low-income households have been struggling to make ends meet and for young people who are trapped in low-paid jobs, with little prospects, it’s an even bleaker situation. The fact remains that more than five million people are earning less than they need to live on.

“Too many families still struggle to afford the basics, meaning we face a scenario that, in 2015, should have long been consigned to the footnotes of history.”

Fiona Weir, the chief executive of single parent support charity, Gingerbread, added: “Working poverty among single parent families is on the rise and child poverty is predicted to grow. Bringing forward much-needed support with childcare costs would help families struggling to make ends meet, as would ensuring in and out of work benefits keep pace with the cost of essentials.”

A Government spokesman maintained income inequality in the UK is now lower than when the coalition came into office and “the recovery is being felt across the country”.