Family earnings are too small and are falling short of making ends meet, according to research released today.
A report from the Joseph Rowntree Foundation has found that the minimum a couple needs to earn to support a child has risen to £36,800 since 2008. A number that is growing due to the increasing cost of childcare and the drop in the amount of available tax credits.
According to the figures the cost of childcare has risen by almost £1 an hour, the cost of public transport has doubled and the amount of tax credits has dropped to point that the families on low incomes are finding their money just isn’t stretching far enough. Worryingly, the solutions that people choose to tackle these problems could land them in debt and give them bigger money worries than in the first place. For example, using a credit card for everyday spending and only making the minimum payment can lead to interest payments amounting to thousands in the coming years.
According to the figures, a single person with no kids will need to earn £16,400 a year to maintain a reasonable standard of living and a single parent would need to earn £23,900.
The report reveals that households are cutting back on exchanging gifts, doing more to shop around for deals and often use vouchers if eating out to make the most of cash.
Julia Unwin, chief executive of the JRF said families have ‘monumental task’ trying to get by.
“Parents facing low wages and pressure on their working time have little prospect of finding the extra money they need to meet growing household expenses”, she added.
Pensioners need an average £231 a week to live comfortably; this can be attained by applying for all available benefits.