The Joseph Rowntree Foundation calculates the cost of living for those living on minimum wage is rising faster than inflation.

It believes the cost for a single household on its low-income budget is up 5.3% this year. Pensioners and couples with children budget rose by 5%. This is primarily thought to be due to higher funds needed for food, fuel and public transport.

A quarter of households are thought to fall below what Rowntree calls the ‘minimum income level’ and the report warns that benefits paid to workers are below minimum income standards.

It does however, show that pensioners getting the full amount of pensioner credit receive enough to meet the minimum income standard.

The group created the baseline measure last year to determine the income people need in order to reach a ‘minimum socially acceptable standard of living’. This includes having ‘what you need to in order to have the opportunities and choice necessary to participate in society’.

These figures come from a survey distributed among the public about expenditure and essentials. The preliminary findings show that, despite the recession, the public still believe the ‘minimum standard of living should allow people in Britain not just to survive, but to play a full part in society.’

Singles & Lone Parents To Suffer

The group also notes that many people are worried that their incomes may not be enough to get them through the economic downturn while still meeting the minimum acceptable standard of living.

It also warns that people losing their jobs will have to survive on half of that minimum standard. On this, the survey showed that the average single person of working age will only receive benefits worth 42% of the minimum income needed. Lone parents with a child could receive 67% of the minimum.

It suggests the national minimum wage would have to be increased by £1 per hour to provide enough money to raise a single-earner household out of relative poverty.

The report attempts to raise debate about the level of what is considered relative poverty in the UK to above the government’s current poverty line of 60%. It also comes as the government prepares legislation to cut child poverty in half by 2020.

The report also suggests that relative poverty is likely to decrease or stabilise this year because of the recessions’ effects.

“This apparently beneficial effect on the poverty figures does not represent a real improvement in the living standards of people on low incomes,” it says. This is due to the cost of living increasing faster than for the average family.

It also says the standard of living could fall if the rate of inflation for those on minimum wage continues to be higher than general inflation rate. But people responding to the survey believe everyone should have access to items that meet key social needs, but there was scaling down when it came to how much should be spent to get these.

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