Two in five families will no longer be able to afford decent standard of living by next election

By the next general election, 43% of families will be unable to afford the cost of essentials, like putting food on the table or replacing clothes, according to new analysis by the New Economics Foundation.

This is an increase of 12 percentage points (3.6 million families, 8.9 million people) between the 2019 general election and December 2024.

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 Chelsea.

The analysis shows the 12.5 million families unable to afford the cost of living by December 2024 includes 88% of single parents and 50% of working families with children. The average shortfall for families falling short of a decent standard of living standard will have risen from £6,200 a year as of December 2019 to £10,000 by December 2024.

NEF is calling for universal credit (UC) to be replaced by a new social security system, a national Living Income. A national Living Income would set an​‘income floor’ benchmarked against the MIS, below which no one can fall whether they are in or out of work.

Under this proposal, over two thirds of the population would see their disposable incomes rise

Sam Tims, economist at the New Economics Foundation, said:

“A decade of cuts, freezes, caps and haphazard migration between systems has left the UK with one of the weakest safety nets among developed countries. Millions of families were already living in avoidable deprivation and hardship but as we enter the greatest living standards crisis on modern records, the day-to-day experience of low-income families is set to become even more desperate.”

“We need a bold new way of providing income support that will help all people deal with the challenges presented by the fast-changing world we’re living in. A national Living Income would set an income floor that is enough to meet life’s essentials, which no one can fall below whether they are in or out of work.”