Family of four now needs £40,800 a year to survive

7 July 2017
Image

Rising inflation and growing household costs mean the average family of four needs an annual income of £40,800 per year to survive.

Households are now paying between 3% and 4% more for goods and services than they were a year ago, according to a report by the Joseph Rowntree Foundation think tank.

It says bus and coach travel, motoring, household insurance and council tax have all typically risen faster than inflation in the last 12 months.

This means that a family of two adults and two children needs to bring in £40,800 a year before tax to reach an acceptable standard of living.

A single person with no children needs to earn at least £17,900 a year before tax.

The report adds that despite a 4% rise in the minimum wage to £7.50 in April 2017, rising costs mean that the lowest paid have become poorer in real terms.

The rate of inflation for the year to May 2017 was 2.9%, according to the Office for National Statistics’ (ONS) latest data. 

Government cuts to both in-work and jobseeker benefits have also had a negative impact on the poorest households.

Campbell Robb, chief executive of the Joseph Rowntree Foundation (JRF), says: “Working families are facing bigger holes in their budgets worth hundreds of pounds, despite a higher National Living Wage and tax cuts.

“It means millions of families are facing a struggle to make ends meet as the cost of getting by in modern Britain rises ever higher. Struggling families tell us as well as juggling the bills, it’s things like after school clubs and swimming lessons that must be sacrificed to cover the essentials.

“With the Bank of England forecasting inflation will increase even higher this year, families are facing no respite. We need the government to take action and ensure living standards do not fall backwards. Lifting the freeze on working-age benefits and tax credits must be the start along with allowing people to keep more of their earnings.”

If you’re looking for ways to save cash, check out the Moneywise guide to the top 20 money-saving websites.

Comments

In reply to by anonymous_stub (not verified)

what Constitutes an '' acceptable standard of living''? 2 new cars on the drive , both on hp / contract hire, winter skying holiday + 2 summer holidays in the sun, seems to me people have their priorities all wrong and expect, expect too much.

In reply to by anonymous_stub (not verified)

HI Naz, the £40,800 income figure is before tax. Have updated the story to make that clearer.

In reply to by anonymous_stub (not verified)

Is the family income of £40,800 gross or net?

In reply to by anonymous_stub (not verified)

So you're saying that the Benefits system is not fit for purpose and that something like 2/3 of the country should really be out on the streets begging as they're not getting this much? However are people managing??

In reply to by anonymous_stub (not verified)

The pension situation is just another example of the crooks the government are. I have worked for 58 years and never claimed a penny in benefits. We brought our 3 children up with no benefits (Except £2 a week in child benefit) for only one child. Our children have always worked and so have the older grandchildren. We have always been independent in our lifestyle. and payed our own way in life. No fancy holidays or new cars, just modest living. For this we are being punished and on the lowest pension rate. I do not have a private pension. We could not afford one. Dossers and scroungers are retiring now on full pension at my expense. When I have recovered from my heart operation I will be back at work as a roofer to supplement my pension and to pay for the scroungers and gimmegrants. Am I missing something?

Add new comment