A minimum income standard for Britain in 2009

In 2008, JRF published the first ‘minimum income standard for Britain’, based on what members of the public thought people need to achieve a socially acceptable standard of living. A year later, and in changing economic circumstances, the standard has been updated for inflation.

Key points

• Based on views of members of the public, a single person in Britain needs to earn at least £13,900 a year before tax in 2009, in order to afford a basic but acceptable standard of living. A couple with two children need to earn £27,600.
• The cost of a minimum household budget has risen by about 5 per cent for most families. This is well above the general inflation rate, because someone on a minimum income spends a greater than average portion of their budget on food, domestic fuel and public transport, whose prices have risen by 7 to 12 per cent. The minimum budget also does not include a mortgage or running a car, whose falling costs have pulled down the general inflation rate.
• Working-age people on benefits remain well below the minimum income standard. Even though benefit rises in April 2009 exceeded the published inflation rate at the time, they were similar to the rise in the cost of a minimum household budget. This means that people on benefits have got no closer to reaching an acceptable living standard.
• The official poverty line is set relative to average incomes, which have stopped growing. People on low incomes whose benefits are still rising may appear to improve their position relative to this poverty line. However, this does not take account of their increased costs, which mean their living standards may not have improved.
• With people losing their jobs, maintaining a minimum acceptable income has become more important than ever. Exploratory research, asking members of the public about their attitude to essentials in light of recession, suggests that they continue to believe that a minimum standard of living should allow people in Britain not just to survive, but to play a full part in society.

The research
By a team from the Centre for Research in Social Policy at Loughborough University

Background

In 2008, the first minimum income standard for Britain (MIS) was published by JRF. There is a need to update MIS regularly, to reflect changes to the cost of living and to living standards.

The standard is based on research by the Centre for Research in Social Policy (CRSP) at Loughborough University and the Family Budget Unit (FBU) at the University of York. Groups of members of the public discussed what was needed to achieve a minimum socially acceptable standard of living. The groups were also informed by expert knowledge.

Over time, changing prices alter the cost of a basket of goods and services that represent a minimum standard of living. In addition, changes in social norms mean that the content of that 'minimum basket' will change. This study considered both those elements, and updated the budgets to April 2009.