Revealed: 29,200 pound a year to keep a family

The annual income required to provide an adequate standard of living for a couple with two children has been declared to be £29,200. The figure, six per cent up on last year, comes in a report by the influential research group the Joseph Rowntree Foundation. It says a family of four has faced additional costs of £1,600 over the past year to meet bills for 'essential' items such as a computer, internet access and mobile phones for adults and secondary-school children. The report for the foundation cited a 5%t increase in a year in transport costs, another 5% in the cost of eating out and going out, and an 18% increase in the cost of running a car.

It also said families need higher earnings because of frozen personal tax allowances and tighter rules on payment of tax credits. The 6 per cent rise in Rowntree's estimate of what a family needs to spend is nearly double the 3.4% latest level of inflation, according to the Government's preferred measure, the Consumer Price Index. The report said that over the past decade, official inflation has amounted to 23% while food has gone up by 37%, bus fares by 59% and council tax by 67%. It suggests that millions of working families are already feeling the pressure of recession deeply at a time of increased anxiety because of looming state spending cuts and tax increases including the VAT hike due in the New Year. The report, produced by academics at Loughborough University, is based on estimates of what a family needs to maintain a minimum standard of living.

The amount would be far higher if it did not exclude the costs of rent, a mortgage or child care. It said: 'Alongside physical essentials, such as food, warmth and shelter, people also need things which allow them to participate in society such as transport, social and cultural activities, and one week's holiday a year in Britain.' A car was said not to be necessary, but an occasional taxi fare to supplement bus and train travel was. The list differs from those now used by civil servants when working out the government's list of family necessities. Research for the Department for Work and Pensions has now suggested that families do not regard a week away on holiday as a necessity, but that an occasional night away from home will do. The Rowntree report said that necessities for a family with two children cost £403 a week, which would need both mother and father to work and to bring in between them earnings of £29,200 before tax. A single person needs to earn £14,400, the report said. Rowntree chief Julia Unwin said: 'This shows what ordinary members of the public think is needed, not just to survive, but to take part in society. It provides powerful evidence for the new government to use as they develop policies to deal with poverty.'

SOURCE: http://www.thisismoney.co.uk