Low-income families need their disposable income to rise by nearly a third in order to meet rising transport, childcare and energy costs, according to a report.

The Joseph Rowntree Foundation said government benefit cuts are hitting lower-earning households in the UK, making it increasingly difficult for them to keep up with the rising cost of living. It called on ministers to consider remedies such as ending the benefit freeze in place since 2015 and to raise the universal credit work allowance.

Despite an inflation-beating increase for the national minimum wage earlier this year – having risen from £7.50 to £7.83 per hour in April – analysis compiled by the Centre for Research in Social Policy at Loughborough University on behalf of the JRF showed families were still falling behind.



The report said a single person needed to earn £18,400 a year to reach the minimum income standard, which is a measure of income people need in order to reach a minimum socially acceptable standard of living in the UK, from £17,900 when the requirement was last calculated a year ago. A dual-earner couple with two children needed to earn £20,000 each, while a lone parent with a preschool child had to earn £28,450 – an increase of £2,500 on the previous year.

Although the Institute for Fiscal Studies finds middle-class households have fared best in the decade since the financial crisis in a recent study, it found people at the top and the bottom had suffered weaker income growth.



According to the JRF, a lone parent working full-time on the minimum wage in 2008 – with help from tax credits introduced under Labour – had a disposable income just £520 a year short of their needs. Following almost a decade of tax credit cuts under Conservative-led governments, people in this situation are about £3,640 a year short.

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Single-breadwinner families – where one parent works full-time and the other does not – have fallen furthest behind, falling short of the minimum income standard by as much as £6,240, which is a shortfall of 27% on what they earn currently.



The past decade of research showed bus travel is 65% more expensive than in 2008, while severe cuts to rural and suburban services have made life increasingly difficult for families in these areas. Weekly food shops have become more than a quarter more costly, while energy bills have gone up by 40%.

Childcare costs have also risen sharply, with the average price of a full-time nursery place for a two-year-old having risen by more than 50% since 2008 to reach £229 a week. Campbell Robb, the chief executive of the JRF, said these figures showed just how precarious life can be for low-income households. “Some working parents are actually further away from reaching a decent living standard because tax credits to top up low wages have been falling at a time when families need them most.”