Who are Prime Minister May’s ‘just about managing’ and what would help them?

A theme of Theresa May’s Government so far has been a focus on families she describes as ‘just about managing’. Katie Schmuecker looks at who might be in this group, and the challenges they face.

Theresa May recently explained what she meant by 'just about managing':

“…putting government firmly on the side of not only the poorest in our society, important though that is and will remain, but also of those in Britain who are working hard but just about managing. It means helping to make their lives a little easier; giving them greater control over the issues they care about the most.”

This could be a radical departure, as it significantly widens the concept of disadvantage. But turning ambition into policy will require a clearer analysis of who the ‘just about managing are’ and the challenges they face.

Who are the ‘just about managing’?

There is a sense that this group is neither completely hard up nor very well off, but otherwise there is – as yet – little definition to who we are talking about. Prime Minster May gave some clues when she referenced people who earn £19,000 to £21,000 per year, and miss out on in-kind benefits such as free school meals.

But trying to define the group by their earnings is too blunt to be useful – how much is enough depends on who else you live with. Household size and family structure need to be taken into account.

A useful guide is offered by JRF and Loughborough University’s Minimum Income Standard (MIS). This produces a measure of income adequacy based on what the public thinks. It is set at a level that enables people to have opportunities and choices to be able to participate in the society they live in.

The graph below shows how much each worker in a household needs to earn for a decent living standard according to MIS. It assumes low housing costs (social housing for families and low private sector rents for single people) and childcare is needed outside school hours when there is no adult at home. While earning £20,000 is likely to enable couple families where both adults work to just about manage, the picture is quite different for families with a single earner or lone parent. Similarly, it would not be enough for large families and those living in areas with higher housing or childcare costs.

Analysis of household income data shows around 30% of people live below the minimum income standard. The risk of falling short is highest for single people living alone, families with children – especially lone parents and single breadwinner households – young people and renters.

Falling a little short of MIS might mean you can afford to buy the kids’ school uniform and lunches, but school trips are a stretch. It might mean the day-to-day running of your household is covered, but unforeseen shocks – like the washing machine breaking, or a higher than expected gas bill – are hard to cope with. And the further below MIS a household falls, the greater the risk of deprivation. When a household only has enough income to afford 75% of MIS (a useful indicator of poverty), they are four times more likely to be behind with household bills and be unable to replace household goods when they break or wear out, compared to a household with 100% of MIS or more.

Levels of poverty

And this comes back to what may prove important about Prime Minister May’s concept. It is helpful to think about people experiencing poverty and those ‘just about managing’ as connected – rather than as two separate groups vying for the attention of policy-makers – for at least two reasons:

First, there is considerable movement between these groups: one in 20 of the population not experiencing poverty enters poverty each year, while around half the people experiencing poverty (which is of course a much smaller group) escapes poverty each year. Second (and related) whether people are just managing or in poverty, they face many common challenges, including the cost of essentials such as housing and childcare, finding work with prospects that they can sustain and balancing work with caring responsibilities. It is also worth noting that many people in poverty are ‘just about managing’, despite facing impossible decisions about money daily.

What would help the ‘just about managing’?

Life events – getting sick, a relationship breaking down, losing a job – tip people into poverty. Those who are living on incomes that are just enough to meet MIS are less able to absorb these shocks. They are also less able to save for a rainy day. Today’s just about managing can quickly become tomorrow’s poverty, or even destitution.

A focus on what helps and hinders this group should be part of a strategy to prevent poverty.

Stability helps people feel they’re able to get on in life. A secure and affordable home acts as a foundation for people to build their lives, while predictable income from work and a job with prospects enables them to plan for the future. Often, the help and support of friends and family – whether through the provision of informal childcare, providing help when crisis hits or being on hand to pay for treats and activities that wouldn’t otherwise be affordable – also makes an enormous difference.

As such, a policy agenda for the ‘just about managing’ should include actions such as:

  • reducing the cost of essentials by building more genuinely affordable homes to rent and buy. In England this would require an additional £1.1billion per year
  • supporting incomes by continuing to top up the earnings of low-income working families. This means reversing the cuts to the generosity of Universal Credit when families are in work, with priority going to lone parents. It also means making sure the value of benefits keeps pace with the cost of essentials
  • improving prospects by developing progression services to support people stuck in working poverty to get on
  • helping people balance working and caring by radically reforming childcare to greatly increase quality, coverage and affordability.

The UK should be a country where, no matter where people live, everyone has the chance of a decent and secure life. To achieve that vision we need to solve the problem of poverty in the UK.