Cost of living in the UK now over £14,000
A new report has published figures revealing what amount of money people need for an acceptable standard of living.
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Last updated: Friday 8th July 2011
By Jonathan Thomas
Know Your Money Editor
People in the UK will have different ideas about the amount of money needed to achieve an acceptable standard of living in social terms.
As time passes, price changes can alter how much money is needed for a minimum standard of living and social changes can dictate the minimum yearly salary that is thought to be required.
A new report from the Joseph Rowntree Foundation (JRF) took both these factors into consideration and aimed to come up with some answers to issues such as what different family types need to earn to meet the minimum income standard.
It also revealed how budgets have changed in the last decade, how recent announcements might impact those on lower incomes and what items are now thought to be necessities.
How much is a single person thought to need?
JRF revealed that a single person living in the UK requires a yearly salary of at least £14,400 a year - before tax - to achieve a basic but acceptable standard of living. A single person of working age, by these figures, requires £175.34 weekly. For a couple with two children the annual figure rises to £29,900, according to the charity.
In comparison to last year's figures the charity's income survey found an increase of three to four per cent in the cost of a minimum household budget in the year to April 2010.
Over the last 10 years, inflation has risen by 23 per cent, but key essentials now cost 38 per cent more.
Essentials taken into account to achieve this figure included food prices - up 37 per cent - bus fares - up 59 per cent - and council tax - up 67 per cent.
Low-income households are thought to be especially vulnerable to the impact of inflation, especially when the cost of essentials like food go up quicker than average.
The report suggested: "Unless employers and the government take this into account when uprating pay and benefits, [low income households] real living standards could fall."
The JRF also suggested that, despite the ongoing economic turbulence, people have not lowered their thoughts on what is needed to attain the minimum standard of living.
For example, the need to be able to buy birthday presents and a week's holiday each year in the UK - but not abroad - was still viewed as necessary to participate at an acceptable level in society.
In addition to this it added that new spending needs have emerged in a changing world.
The report stated: "In 2010, the essential need for a computer and home internet access in all working households, not just those with schoolchildren, impose significant extra costs on low-income households."
Pensioners in the review groups agreed the internet is growing in importance, but disagreed that home internet access is part of a minimum living standard for them, so it was not included in the budgets for pensioners.
For households in work, the salary required to reach the minimum standard was found to be well above the national minimum wage (currently £5.80 per hour).
The living wage was found to have risen from £7.14 to £7.60 in the last year.
Donald Hirsch, of Loughborough University and one of the report's authors, said: "This new research underlines how people living close to the minimum income standard can end up not having enough, if economic trends start going against them.
"For example, a single person who a decade ago had just enough to get by and whose income has risen in line with official inflation, cannot afford a minimum budget today."
He added that big rises in the prices of essentials like food and council tax means that some people in the UK will be nearly £20 a week short of the minimum they require and will be forced to consider what things they will go without.
A spokesman for the Department for Work and Pensions said: "We are firmly committed to tackling poverty and improving the lives of low-income families. We remain focused on our goal of ending child poverty by 2020 and are conducting a review into poverty and life chances."
He stated that jobs remain the best route out of poverty.