“Today’s predictions offer little relief for millions of families on low incomes. The Bank of England forecasts pay will rise by 3.25% in 2018, barely above predicted inflation of 2.8%. This means that most people struggling now will still be struggling in a year’s time.
“The good news is that the economy is also predicted to grow by 2%, which is more than previously expected. But economic trends over recent years show that people on lower incomes can’t rely on economic growth alone to raise their living standards.
“Less wealthy families spend more of their income on basics like the weekly shop, meaning that they are hit harder by rising prices. People in the bottom fifth of the income scale typically spend £1 in every £6 on food, compared with £1 in every £12 for the richest fifth.
“If we are serious about helping people who are just about managing, then we need to get to grips with the high cost of living, which tips millions of people into poverty.”
To help support just about managing families, JRF recommends the Government:
- Lifts the freeze on working-age benefits and tax credits in the Budget to keep them in line with increases in the cost of essentials and protect low income families from the rising cost of living
- Takes action to reduce the high cost of housing in its White Paper due to be published next week, by including an affordable rented offer for people on low incomes
- Works with regulators and businesses to end the poverty premium, which costs low income households £490 a year on average