OVER A THIRD OF HOUSEHOLDS (10.6 million) will be unable to afford the cost of essentials like household bills or a trip to the dentist by April 2024, according to new analysis by the New Economics Foundation (NEF) in response to the Autumn Statement.
The poorest 10 per cent of families are set to see annual incomes fall £2,300 below rising costs of basics between April 2022 and April 2024. Meanwhile the richest 10 per cent will see their incomes rise by £1,600 more than the increase in cost of essentials.
The analysis takes account of all income growth between April 2022 and April 2024, including higher earnings, benefit uprating, previous support for the cost of living crisis and the latest measures announced by the Chancellor. The rise in incomes is then compared to the effects of inflation on every family’s basic basket of goods and services needed for a decent quality of life.
The research uses the Minimum Income Standard (MIS), which is the UK’s leading approach to measuring living standards based on need and is used to calculate the‘real’ Living Wage paid by companies like Ikea and KPMG, and football clubs like West Ham, Liverpool, and Everton.
Sam Tims, economist at the New Economics Foundation said: “We needed a plan to support people through the cost of living crisis and kick-start the economy. Instead, people’s incomes are going to be hit even harder and we’re facing the longest and deepest recession among rich economies.”
“Today’s announcement to increase social security payments by inflation keeps things as they are: with the benefits system plagued by the ongoing impact of austerity. Support is still far below what families need, forcing people to go without heating and rely on foodbanks, particularly those impacted by the benefit cap, which should have been scrapped, not increased.”
“Social security needs a fresh start. To support every family through this income crisis and the looming recession, the current system should be replaced by the living income which would set an income floor that’s enough to meet life’s essentials.“
* Source: New Economics Foundation