A couple with two children need to earn £36,800 each year to have a socially acceptable standard of living, according to a Joseph Rowntree Foundation study. This is up by nearly one-third since a similar study in 2008.

The study examined what members of the public think people need for a socially acceptable standard of living, and how much money different households (working-age people with and without children, and pensioners) need to reach this standard.

Couples with children have been hit in three areas in particular:

• Childcare costs have risen by nearly one-third since 2008 and are now families’ single biggest weekly outgoing.
• Bus travel has doubled in price since the late 1990s, while public transport has been cut. This means that families with children now regard having a car as an ‘essential’.
• Cuts to tax credits have increased earning requirements substantially, more than cancelling out the benefit of higher income tax thresholds.

Despite the economic squeeze, the public have not fundamentally changed their views since 2008 on what goods and services are needed for an adequate standard of living. The recession has made people more thrifty in trying to achieve an acceptable minimum – for example, cutting back on gifts and shopping around for deals when eating out. But these savings have been more than cancelled out by increases in costs.

Source: Abigail Davis, Donald Hirsch, Noel Smith, Jacqueline Beckhelling and Matt Padley, A Minimum Income Standard for the UK in 2012: Keeping up in Hard Times, Joseph Rowntree Foundation
Links: Report | Summary | JRF press release | BBC report | Guardian report