Does your household earn above the minimum to feel economically secure?

New research by the Joseph Rowntree Foundation highlights that you’d need this amount to reach society’s minimum expected standard for a working couple with two children.  Our analysis of the latest small area income data shows that in 72% of medium super output areas across the East Midlands (Government geographical boundaries roughly the same size as a Council Ward) the average income could be insufficient to reach the Minimum Income Standard (MIS).  This means you would be going without goods and services required to lead the minimally acceptable standard of living for a UK family.

Our work with the RSA on Economic Insecurity and Ordinary Working Families highlights the growing concern voiced by citizens about the economically unstable position they find themselves in. Our research shows that over 80% of people who identify as Just About Managing or Not Managing are concerned that the cost of living will continue to outpace wages.  Even 79% of those self-identifying as Comfortably Well Off are worried.  We need to tackle this emerging issue to support people to feel confident in their economic position, something that NCE is interested in exploring.

The tenth anniversary report of the first MIS highlights this challenge clearly. Over the last 10 years the CPI Inflation rate has risen by 25% but the cost of the basket of goods purchased by a typical couple has risen by an additional 5% on top of this.  Lone parents with two children see a 13% difference meaning they are in a much more difficult position needing to earn £28,450 for them and their children.  Whilst £40,000 might seem sufficient for a family, this figure is the gross income the household would need.

Our mapping of gross income averages across the region highlights the 390 areas which may face particular difficulty. In Nottingham, for example, only three super output areas have an average gross household income over the £40,000 threshold. The interactive map below allows you to explore this ONS data. For a fullscreen view click here.

Nottingham Civic Exchange fully supports the JRF’s MIS work as it continues to explore how people experience price changes and wage stagnation.  We believe much more needs to be done to explore the issue of economic insecurity across the UK. Headline figures do not provide a detailed and nuanced view of people’s everyday experiences and the MIS helps us realise where we each fit, allowing policy makers to better target resources and policy ideas.

Alongside the RSA we are supporting a student research project that will help to provide detailed analysis of the new ONS Household Cost Indices, which showcase the differing impacts of inflation on earners across the income distribution.  This is affected by the fact that households with different levels of income tend to buy different things – a fact that is not captured by the headline measures of inflation used by the Bank of England and the Government to trigger policy responses.  The project aims to analyse the differing impact of inflation across the income distribution to help consumers and policy makers make more informed choices. This latest release of the MIS will support our student researchers to understand the wider context of inflation.  One of the key findings from this latest report is the above inflation rises for transport, food, childcare and energy.  For example, the cost of a full-time nursery place has risen by 50% since 2008 to £229 per week.

The Minimum Income Standard for the UK in 2018 is available via the JRF website.  Alongside a review of ten years of the MIS you can also use the Minimum Income Calculator at www.minimumincome.org.uk to understand your own personal position.

To find out more information on our Breadline Inflation project watch our news feed and follow #breadlineinflation on Twitter.  The researchers will be publishing three blog posts in partnership with our RSA colleagues through the summer and regularly tweeting on their experiences and findings. Nottingham Civic Exchange is continuing to develop research on Ordinary Working Families and those facing economic insecurity.  Pilot interviews with local families are currently underway and you can find out more by contacting notts.civicex@ntu.ac.uk for full details.