What are the basic needs and how much does it cost?

Recent research shows that a couple which has two children in the United Kingdom requires earning an aggregate amount of £40600 for them to raise the children and support the family’s basic needs. This amount is fifty percent more than what it cost to bring up a family before the recession. The report highlights that families now have to face soaring energy bills as well as the cutting on benefits, which in turn raises their costs of living. The Joseph Rowntree Foundation, otherwise known as the JRF, delved into this research and by the end of it, they discovered that there was a significant disparity between the minimum amount of money required to lead a decent life and what people make in a year.

Growth rates

The amount of money required to raise a family comfortably is 46% more than what it was in the year 2008. However, the earnings of the population are growing at a much slower rate, showing an increment of only 9%. Comparing the two percentage increases, it is evident that the current costs of living are too high. On top of the slow increments in wages, families also have to deal with the changes to their tax credits as well as employee benefits and this puts them in a tight corner financially.
Effect on low-income earners
The research goes on to show that even if the wages began to increase, it would take a long time for the impact of such an increase to get felt. Low-income families would be the first to get hit, being unable to close in on the gap between their needs and what they earn. This disparity comes about because of the small payments that they receive, the rising prices of commodities as well as the reduced support that they receive from the government. As such, people cannot rely on just wages to solve the problem, and there needs to be another solution in hand.
Price of goods
This research which got carried out by the Loughborough University shows that a basket of goods costs at the minimum an average of twenty-eight percent more than what it did in 2008. This increase is much higher than the officially stated inflation rate which stands at nineteen percent. The main hit areas were food which was up by twenty-six percent; bus travel which increased by thirty-seven percent and domestic energy whose costs went up by forty-five percent. There are a growing number of people who are unable to afford basic needs over time, given the rising costs of goods. These are the people whose incomes fall below the minimum income standard.

What do people consider as basic needs in the UK?

In the recent years, people have held discussions on what they consider to be fundamental needs and what it means to them to live a decent life in the United Kingdom. Most state that their basic needs cover being in a position to feed their families, having the necessary equipment to heat their homes during cold seasons, having some money on the side to treat the children to a birthday present and scraping up enough money for the occasional outing with the family. Most people felt that housing, heating, and feeding were some of the most critical primary needs alongside healthcare and education.

Current state

The UK economy is slowly regaining the strength that it possessed before things took a turn for the worse. However, many households feel that they were better off before the recession. JRF completes the report by stating that there is a need for some actions to be aimed at the reduction of poverty and inequality in payments. These problems can be solved if the government works on aiding households by finding methods to reduce the costs of essential commodities and raising the minimum wages offered to employees.
Companies can help households out by paying employees the recommended living wage. Companies such as Nestle have committed to paying their employees in such a manner, £8.8 an hour to their employees in London and £7.65 in other areas in the United Kingdom. Some people urged the government to make the living wage law, but the ‘Living Wage Commission’ emphasized that the payments should be voluntary and should depend on the employer. People also feel that the costs of living in the UK have gone up in the recent years, and the ability to afford basic needs has dwindled. With the government measures in place to stabilize the economy, we hope that people will once again be in a position to enjoy their necessities.

Minimum income standards in the UK

JRF came up with the minimum income standard concept in the year 2008. The organization’s research shows that the most hit population as a result of the recession is people with children. For a single parent with one child, they require raising £27000. This amount is more than double when compared to the £12000 they needed in 2008. Where a couple has two children, each of them needs to come up with £20300 which is much more than the £13900 that they needed in 2008.
Taxation
Government changes have had an impact on the financial stability of families. The report shows that for every £1that families in the low-income sector gain as a result of raised tax allowances, they lose an average of £4 because of the cuts that have gotten made to tax credits as well as child benefits. The increases made in the personal tax allowances have enabled single people without children to be in a position to save more of their earnings. This reduction has in effect, reduced their minimum income standard to £16300 which is lower than what they had to have in the previous year. However, when this amount gets compared to the £13500 that they needed in 2008, the cost of living is currently quite high and unaffordable to many. The £20300 before tax amount that gets expected of each person in a couple that has children lies below the average gross salary in the United Kingdom. However, lone parents require £27073 which is higher than the average total earnings of £26884.