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