How much money do you actually need to live off?

£10,000? £20,000? £30,000?

Have you ever thought about how much money you actually need to have a decent standard of living?

The Joseph Rowntree Foundation (JRF) has worked out the Minimum Income Standard (MIS) for 2018.

This is based on what the public thinks we all need for an adequate minimum living standard – including food, travel, rent, energy bills, childcare and more.

What do you need to live off?

  • A single adult needs £18,400 before tax and benefits
  • A single parent with one child needs £28,450 before tax and benefits
  • A single parent with two children needs £35,200 before tax and benefits
  • A family of four needs £40,000 before tax and benefits

2008-2018

The report from JRF also shows how prices have risen considerably faster than wages over the last 10 years.

Low income families now need a third more in disposable income than a decade ago to make ends meet.

Since 2008, costs have risen 35% for single working adults, 30% for couples with two children and by 50% for a pensioner couple.

Travel, energy, childcare and food are some of the sectors with rapidly increasing prices.

Bus prices, for example, are 65% more expensive than in 2008, meaning a single adult will now spend £37 a week on transport compared to £17 in 2008.

On top of this, the average price of a full-time nursery place has risen by well over 50% to £229 a week and food prices have also risen by 50%, from £29 to £44 a week for a single adult.

cost of living

Minimum Wage not enough?

Despite National Living Wage and Minimum Wage increases, many working parents are actually getting further away from reaching the MIS.

In 2008, a single parent working full-time on the minimum wage and helped by tax credits was £520 short of the MIS. In 2018 they are £3,640 short.

A couple both working full-time on the minimum wage with two children will be £2,600 short of what they need, and a single breadwinner family with one full-time worker on the minimum wage will be £6,240 short.

Pritie Billimoria, Head of Communications at Turn2us, said:

“A ‘decent standard of living’ is a dream away for most of the people we help. Over 1.5 million people who came to us in the last 12 months have incomes of less than £10,000 a year, let alone the minimum income standard.

“If nothing is done to tackle the low wages, high rents, crippling transport costs, unaffordable childcare and ever increasing food and energy bills that are behind this high cost of living, we will see more people make the impossible decision whether to eat or pay the rent.”

Source: Turn2us

Are your bills higher than average?

How much are the average water, energy and council tax bills?

In the last few years, bills of all sorts have risen sharply. Since 1989, water bills have risen above inflation by over 40%; energy bills have gone up by 10% in the last 12 months alone; and some local authorities can increase their council tax bills by up to 5.99% this year.

Paying Bills

However, while bills rise, many people are still over paying. Find out what the average bills in the UK and see if you are entitled to cut your costs.

Water

  • The average household will pay £405 a year for their water and sewage services.

Water bills are expected to rise by 2% – £9 – for the 2018/2019 year. However, this does vary region by region across the UK.

Those living in the South East will find their average bill about £14 cheaper, while those living in the North West may be paying £18 more.

Find out what help is available with water bills

Energy

  • The average small household will pay £795 a year
  • The average medium household will pay £1,163 a year
  • The average large household will pay £1,639 a year
  • The average variable tariff is around £1,135 a year.

A small household has one or two bedrooms; a medium house has three; and a large house has four or more.

Often switching supplier is the simplest way to cut down your energy bill; and there are a range of schemes, safeguarding tariffs and other help available.

Find out what help is available with energy bills

Council Tax bills

  • Average band A is £1,061 a year
  • Average band B is £1,237 a year
  • Average band C is £1,414 a year
  • Average band D is £1,591 a year
  • Average band E is £1,945 a year
  • Average band F is £2,298 a year
  • Average band G is £2,652 a year
  • Average band H is £3,182 a year

While Council Tax bills vary considerably, millions should expect their bills to increase by £100 in 2018/2019, as 93% of councils plan to put up fees.

Additionally, other council services, such as burials and parking permits, are also expected to increase in cost.

Find out what help is available with Council Tax bills

Internet costs

  • The average broadband yearly bill is £336.12.

Using comparison sites is a quick and easy way to see if there are better prices available.

It is also worth checking you aren’t paying for more than you need. Are you paying for unlimited download usage when you use a lot less? It is always worth checking to compare.

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