Scottish independence: Families need to earn £40k

WORKING families have seen a massive hike in the cost of living in recent years, with flatlining wages leaving many struggling to make ends meet, new research has found.

The SNP seized on the report as further evidence that the Westminster system is not working for Scotland. Picture: Stuart Cobley

The average working couple with two children has seen their household budget jump by almost 50 per cent and there is “no guarantee” economic recovery will restore living standards, the Joseph Rowntree Foundation (JRF) report finds.

The Scottish Government seized on this as further evidence that the Westminster system is not working for Scotland ahead of the referendum, insisting that UK government policy is damaging the most “vulnerable in society”.

But the coalition government insists that a strong economy is the “best way” to help Scots by getting more people into work.

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The burden on household budgets to meet bare essentials has soared by 28 per cent since the financial crash of 2008 and, despite the economic recovery, earnings have gone up by just 9 per cent, according to today’s report.

A couple with two children needs to bring in a total of £40,600 for a minimum acceptable standard of living – but most can expect to be £10,000 below this. Single people need to earn £16,300 a year before tax.

JRF chief executive Julia Unwin said there is still some way to go to “make up the lost ground” for struggling families.

“The income they need to make ends meet has soared at a time when their ability to make up the shortfall is severely constrained,” she said. “There is no guarantee recovery will restore living standards for the poorest families, so we need joined-up measures to help alleviate the pressure on the worst-off households. As the recovery gathers momentum, we must ensure those in greatest need feel the benefits of growth.”

The figures are based on the JRF’s minimum income standard (MIS), which sets out the basics that should be included in a minimum household budget, according to public opinion.

These include clothing, household goods like furniture, personal items like toiletries, transport and social and cultural participation like access to a TV and the internet.

It comes after data from the Office for National Statistics last week showed disposable income in Scottish households has seen a real-terms rise of 27 per cent since 1997, higher than the UK average.

In the latest report, a couple with two children in 2008 would reach an acceptable living standard if each parent earned £14,000. While they could now expect, in line with average increases, to be earning £15,000 each, that is about £5,000 short of the £20,400 required today for the same living standard.

A lone parent with one child needs to earn £27,000 – more than double the £12,000 needed in 2008.

A single person without children needs to earn £16,400 – up from £13,500 in 2008, but down slightly compared to 2013.

Pensioners listed having the internet at home as essential for the first time while working-age adults without children said that having a landline is no longer necessary.

Scottish Government welfare minister Margaret Burgess said: “Welfare changes by the UK government have seen lone parents worse off, family household incomes cut and more children pushed into poverty.

“It’s frustrating, when so much work has been done, to see the IFS predict that 100,000 more children in Scotland will be pushed into poverty because of these unfair policies by 2020.”

Cuts in the benefits system have hit working families with children, particularly those needing childcare, who rely heavily on support from in-work benefits and tax credits.

Report author Abigail Davis said: “The people we talk to have held a consistent view of what it means to live at an acceptable level.

“It means being able to afford to feed your family and heat your home properly, but also having enough to buy a birthday present for your children.

“The growing number of people who fall below this standard are unable to afford basic goods, services and activities that most of us would take for granted.”

A Treasury spokesman said: “The best way to help those in the most need is to have a strong economy that creates jobs, and a tax and welfare system that helps people into work and makes work pay.

“The government’s long-term economic plan is doing exactly that.”

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