“Dip in Living Standards” for Out-of-Work Families

The Joseph Rowntree Foundation (JRF), an anti-poverty campaign group, has warned that families who are out of work are facing a significant drop in their standards of living. This is a result of cuts to the benefits these families receive, leaving them without the income needed to achieve an acceptable standard of living.

Couples who are out of work and have children are currently facing “a decade of sharply declining living standards,” the JRF has warned. By 2020, the organisation predicts, a couple who are looking for work and have two children will fall short of the level of income they would need for an acceptable standard of living by £221 every week.

Pensioners will fare rather better, and will have the amount of money they need for acceptable living standards, albeit narrowly. Retirees will exceed this threshold by £15 a week. All of these calculations are made using the JRF’s own estimates of what will be an acceptable level of income by 2020.

Following on from Chancellor George Osborne’s July budget, which announced a number of key changes, many groups are set to become better off by 2020 than they are now. Pensioners, those in work who do not have children, and families where both parents are working full-time are among those who are likely to find themselves in a stronger financial position in five years. However, families with more than two children and single parents will either see their standards of living hold steady or decline, the JRF’s research suggests.

Two of the key measures at play – both announced in the July Budget – are the introduction of a National Living Wage, and significant cuts to certain benefits such as tax credits. The former will create a noticeably and fairly sudden increase in wages for families in lower income brackets, but the latter will offset some of these benefits in many cases and could lead many people to become worse off. Shortly after the Budget , the Institute for Fiscal Studies (IFS) predicted that the changes it contained would lead 13 million families in the UK to be left out of pocket, each losing an average of £260 per year.

According to JRF chief executive Julia Unwin, “the wage rise comes hand in hand with changes to in and out of work benefits. Families will only be able to make ends meet if they have two parents in full-time work, but those who are able to find extra work will face a difficult juggling act as they try and make longer hours fit around family life.”

Post Navigation