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Cost of living 20% higher for British families

The Joseph Rowntree Foundation published research indicating that the cost of living has risen by 20% for many British families with children since last year. They must now earn one fifth more to maintain an acceptable standard of living.

The research indicates a couple with two children need to earn at least £18,400 each if both work full-time, whereas a single person with no dependants needs to earn £15,000. A lone parent would need to earn a salary of £18,200.

Researchers have found that the cost of a `minimum basket of goods and services` has risen by 43% in the last ten years, compared to a 27% increase in the Consumer Price Index (CPI). These differences are important for people on low incomes who rely on benefits and tax credits - which are now uprated by the CPI (a lower rate than the rising cost of living).

Dailymail.co.uk reported today that a family with two children would need to earn £640 per week or £33,280 per annum to be considered a `Middle Briton`, quoting figures from the Institute for Fiscal Studies. It states young families, single people and pensioners are `feeling the pain` of the rise in cost for essential bills, such as food and energy.

The Chief Executive Officer of insolvency trade body R3, Graham Rumney, released a statement on the subject of a `hike in fuel prices`:

"The impact of the increase in (fuel) prices will really hit home with the arrival of the colder weather when many households will have to decide whether they can afford to heat their home and keep on top of their other financial commitments."

A spokesperson for the IVA Advisory Centre commented:

"The real concern is for those on low incomes, who in some cases are struggling to make ends meet. Anyone concerned that they cannot meet debt commitments at this time could seek the advice of a financial specialist or consider one of the many debt solutions that may be available."