23.4 MILLION PEOPLE UNABLE TO AFFORD THE COST OF LIVING THIS SPRING
Nearly half of all children will be living in families that have to make sacrifices on essentials
Living expenses are rising faster than at any point in recent history. Last
month, annual inflation rose to 5.5%, the highest level in 30 years. This means that clothing is becoming more expensive nationwide, gas bills are rising, and weekly food costs are
rising. But that's not the end of the inflation story. The Bank of
England predicts inflation will peak at 7% by April, but the Resolution Foundation said a downturn in the economy due to the conflict in Ukraine could push peak inflation
above 8%.
I'm predicting. The effects of inflation can be felt across the income range, but as poverty activist and writer Jack Monroe recently pointed out, the effects
are not the same. Some parts of the UK increased their savings during the pandemic, but this was not the case for low-income earners. The various effects of inflation and the lack of savings mean that households that are most incapable of
responding to rising prices will be hit hardest.
The
reality of high inflation will be tough. Food banks have not yet distributed more than 2.5 million emergency food items distributed last year. In 20/20, the Joseph Rowntree Foundation found that 18.2
million people (27.7%) live below the standard of living that is socially
acceptable. A new analysis by NEF estimates that number will increase to 23.4 million (34.2% of the population) by
April. Surprisingly, the average shortfall for those below this
threshold is £ 8,600 per year.
Use the Minimum Income Criteria (MIS) calculated by the Center for Social Policy
Research at Loughborough University to
measure living expenses. Households of different family types are calculated based on
what the general public believes is necessary for an acceptable standard of living. You can then compare those budgets to people's income to get an accurate picture of how many people can't afford to pay for their living expenses. Here are some examples of weekly budgets for different family types:
The cost of living will rise by around £20 a week for most family types
MIS after housing costs (AHC) for four different family types in 2021 and our estimated 2022 scenario
MIS AHC 2021 | Estimated MIS AHC 2022 | |
Single adult, working age | £206.55 | £225.49 |
Couple, pensioners | £290.76 | £312.25 |
Lone parent, two children; one aged 2 – 4 and one primary school age | £378.02 | £408.13 |
Couple, two children; one aged 2 – 4 and one primary school age | £471.41 | £507.11 |
Note: 2021 data taken from Minimum Income Calculator UK, the 2022 MIS estimate assumes that the prices of all non-energy goods grow at the same rate between now and the Bank of England inflation forecast for April 2022. Adjustment for the energy price cap takes into account the 54% increase in energy prices in April and adjusts other inflation estimates accordingly.
MIS values for April 2022, 2021, using the latest Bank of England forecasts and National Bureau of Statistics data on various items of inflation. Inflation is based on the Bank of England's forecast of 7% in the second quarter,
taking into account an increase in energy price caps of 54%. The breakdown of the weekly budget for one adult working age household in 2021 and the forecast for 2022 are as follows.
Prosperous chart According to our calculations, it is important to meet price limits, and fuel costs will continue to rise in October, which will occupy an even larger portion of people's budgets in the future.
Umair Shahid
