I think it’s necessary to break this down by region. I’m a singleton earning about £15,000, but I certainly don’t need that much just to make ends meet. My avoidable expenses include smoking, nights down the pub, eating out, DVDs and video games, and so on – and I could save quite a bit in rent if I lived in a small room in a shared house rather than in a spacious two-bed flat.

I really doubt that “making ends meet” includes going to restaurants, buying Xbox games and eating free-range chicken. So I suspect that the £15,000 seems high to me as I live in the Northwest rather than London or the Home Counties. This looks like useful broad analysis, but I’d be wary of applying it to individuals by saying “X% of people in Town A don’t earn enough to get by”, or similar.

I get £9,000 a year & save regularly. I live in inner London. This report is more posh Islington types who have no idea how to live simply.

@paulbarker

Not disputing your anecdote, but I’d be interested in how this breaks down.

Even if you live in a box room/small bedsit, in a badly maintained house in a rough area, you would be lucky if you were paying less than £100/week. There’s £5,200 right there.

If you are as frugal as possible (and single) you would struggle to pay less than £20/week in food – another £1,040.

So you live on £2,800 per year, with which you pay utility bills, travel costs, clothes, council tax, TV license, broadband connection etc

And manage to save – how much? £1,000 savings a year brings your monthly non-housing non-food outgoings to £150/month.

@ Paul

Are there any unusual circumstances around that? E.g. do you have controlled rent, or live in a home that you or friends/family own outright, or have a job that comes with board? Actually, simpler question: how much do you pay in rent/mortgage a month?

Forgive the slightly personal questions, I’m just having trouble working out how someone lives in inner London on £9,000 – I’d have thought more than half of that would go on rent alone.

@ 2

Oh, and when you say you “get” £9,000/pa is that gross or net?

These JRF reports are getting more interesting each year. Floundering more each year that is.

Take the “requirements” for the dual earner couple with two children. Recall, this is their “minimum”, in the same way that the Living Wage is the minimum acceptable lifestyle (Indeed, the LW is calculated from the JRF work).

£36,800?

Oh come on now guys, you’re starting to take the piss. That’s the average household income of the 4 th quartile. The average household income of the 60% to 80% richest households in the country.

It’s only in Lake Woebegon that everyone can be above average…..

Actually, this gets even better. I’m pretty sure that £36,800 is above mean household income, let alone median. So that even if we had a perfectly equal income distribution, our family above would still be below the “minimum”.

Bear in mind that these figures are not based on some arbitrary minimum living standard. This is what most people think is the minimum. I beleive it also includes the cost of Sky – because most people think thats a necessity not a luxury.

So where’s the problem in capping benefits at 26k then, if you need 8.5k to survive at an acceptable level?

Anyone??

@Chaise

Agree with your main point @1 – break it down by region – but also I point to this “For a family of four” from the OP – naturally a singleton will be able to get by on less than a family. Kids are expensive!

@ 8 (myself)

Sorry that should read “18.5k to survive”

@7 John Ruddy

“Bear in mind that these figures are not based on some arbitrary minimum living standard. This is what most people think is the minimum. I beleive it also includes the cost of Sky – because most people think thats a necessity not a luxury.”

Not quite: the opinions of “ordinary people”, whoever they may be, can be amended by experts: http://www.minimumincomestandard.org/.

If those experts allow a Sky subscription to count as a necessity, I’d like to know what exactly they are experts in, other than generating excitable political headlines.

I’d also like to know figures for how many people actually think a Sky subscription is a basic need, as that would argue for it being extended free to prisoners and those on benefits.

@8

Well the government itself said the cap will make 20,000 people homeless…

@ 9 S Pill

“Agree with your main point @1 – break it down by region – but also I point to this “For a family of four” from the OP – naturally a singleton will be able to get by on less than a family. Kids are expensive!”

Table above gives £15,000 as the minimum income for a singleton, which is the figure I’m working off.

“I think it’s necessary to break this down by region. I’m a singleton earning about £15,000″

Its also about circumstance. 15k is awesome if you live with your parents and they don’t ask for rent. It’s crap if you have 2 kids, a partner and a mortgage/rent plus bills. It’s a shame JRF have sensationalized this to an 18k figure, (or 36k for families), as it means the important point is going to be lost; which is wages are stagnant or even declining, whilst the cost of essentials such as heating is going up. And this will hit poorer families harder, and mean many low wage households will not be able to afford the essentials.

@ 7:

“I beleive it also includes the cost of Sky – because most people think thats a necessity not a luxury.”

If most people think that Sky TV is a necessity rather than a luxury, they really need to sort their priorities out.

@John Ruddy – This chart is pretty accurate. I earn about £12k after tax and I don’t have Sky. I have the cheapest internet around for £10/month because I wouldn’t be able to do my work without it. I live in a house with 2 other people all sharing rent and bills. And I still only just get by.

@ 8 Tyler

“So where’s the problem in capping benefits at 26k then, if you need [18.5k] to survive at an acceptable level?”

Salary of £18.5k is based on two adults working – i.e. a family of four would need twice that (see table). Is your £26k cap for individuals or households?

@ 14 Planshift

“Its also about circumstance. 15k is awesome if you live with your parents and they don’t ask for rent. It’s crap if you have 2 kids, a partner and a mortgage/rent plus bills. ”

I’m starting to think I’m the only one who read the article… The figures above account for your family/dependents. And as they all include housing costs, I’d assume anyone living for free with their parents simply isn’t applicable.

@13

Oh, gotcha.

I’ve just read the report by MIS on which these figures seem to be based on. And the report is bonkers. The final figure they got is pretty much right for me but the way they got to it is ridiculous. ‘Single adult of working age’ spend £4.96/week on alcohol and only £10/week on fuel. How long since these people left the house?? Link to the report (figures on page 15) – http://www.minimumincomestandard.org/downloads/2011_launch/MIS_report_2011.pdf

I get £9,000 a year & save regularly. I live in inner London. This report is more posh Islington types who have no idea how to live simply.

Any tips for a fellow Londoner?!

“Take the “requirements” for the dual earner couple with two children. Recall, this is their “minimum”, in the same way that the Living Wage is the minimum acceptable lifestyle (Indeed, the LW is calculated from the JRF work).

£36,800?

Oh come on now guys, you’re starting to take the piss. That’s the average household income of the 4 th quartile. The average household income of the 60% to 80% richest households in the country.”

…because the average household income includes households of all sizes. For your critique to be meaningful, you’d need to compare the £36.8k MIS figure to the average income for households with 4 people (or for 2 adults/2 children).

Arguing that the JRF research is “increasingly desperate” because it finds that larger households require more money than smaller ones is not an especially compelling insight.

“So where’s the problem in capping benefits at 26k then, if you need 18.5k to survive at an acceptable level?”

Because the benefits cap doesn’t just apply to individuals, but to large families who need considerably more than 18.5k.

@ 20 Adam Stewart

“The final figure they got is pretty much right for me but the way they got to it is ridiculous. ‘Single adult of working age’ spend £4.96/week on alcohol and only £10/week on fuel. How long since these people left the house?? ”

Total guesses here, but if fuel is calculated separately from transport costs it might only account for non-commute travel – e.g. shopping and such.

As for alcohol, giving a weekly figure doesn’t mean that you would spend it weekly – maybe it’s based on one night out a month? In any case, I really don’t see why a minimum acceptable income would account for booze at all, as it’s a luxury.

Note to author. Could we have a deep link to the permanent location for the report next time?

What’s Sky? I have free to air satellite, which is ample.

Thanks

@timworstall

Surely this approach of calculating minimum income is a preferable one to the arbitrary poverty line?

Perhaps right-leaning people could do a similar bottom-up exercise demonstrating the error of JRF’s ways (based on the view of the rich and powerful of what the peasantry should be allowed), rather than just carping that a £26,000 income is too generous for a family of 7?

@ 17 Chaise

Remember that the 36.8K is PRE tax, the 26k benefits effectively POST tax.

So they’re not really that different, once tax is netted off.

@ 12 Mr S Pill

http://blogs.telegraph.co.uk/news/sebastianpayne/100095207/forty-thousand-families-on-the-streets-as-a-result-of-idss-benefit-reforms-check-the-figures-this-story-doesnt-stand-up/

“The DWP’s “Policy Simulation Model” states that 20,000 households will lose less than £50 a week, 12,500 households will lose £50-£100, 10,000 households will lose £100-150 and 7,500 households will lose more than £150.

There is no explanation in the letter of how the cut in benefits will lead to homelessness. The DWP has never denied that the cuts could cause some homelessness, nor that there will be costs incurred by local government”

trying living on £96 without legs and see how you do. because thats what i get.

Hi

Thanks for all the comments.

MIS DOES NOT INCLUDE SKY TV!

That is all.

Thanks, Chris.

HA HA HA!!! Single working-age person minimum earnings on 15,000!!!

I survived with half that for more than a year.

When people say “I live on less than that…” are the including all the benefits they receive into the sum or just their wage?

#30

Could you have sustained living on half of £15,000 permanently?

@ 31 Josh

“When people say “I live on less than that…” are the including all the benefits they receive into the sum or just their wage?”

So far, the people on this thread bragging about how they can survive on much less than JRF’s estimates have been somewhat reticent about how they achieved this feat. Leading me to suspect that they’re talking about their net rather than gross salary, or keeping quiet about other sources of income, or failing to declare special circumstances like not having to pay rent or a mortgage.

Of course, it’s possible that they genuinely live Spartan lifestyles – sharing a 2-bed flat with three other people, never having a meal that costs more than about a pound a serving etc – but it’s a little suspicious that they haven’t shared these tips with the group…

“bragging about how they can survive on much less than JRF’s estimates”

Ah, no, you’re misunderstanding the basis of the JRF estimates.

JRF: “What do people think you should be able to afford without people thinking you’re poor?”

People tend to think that you should be able to go out for a meal once a month, the boozer once a week for a couple of pints, be able to buy x amount of clothes etc etc.

The JRF measure is what does the society at large think is the poverty line.

There’s nothing wrong with such a measure either. Adam Smith made much the same point (a linen shirt ain’t a necessity, but if you live in a society where not being able to afford a linen shirt means you are regarded as poor then if you live in such a society and can’t afford a linen shirt then, by the standards of that society, you are poor. You can chack this by trying one of the searchable versions of Wealth of Nations for the phrase “linen shirt”.)

This JRF measure, for all it’s usefulness, is entirely different from what is necessary to *survive*. You may or may not remember, years back, Matthew Parris, when an MP, was dumped in a council flat on the dole with a TV crew. Could he survive on t’dole? He didn’t do all that well it has to be said.

I’d love someone to do this again with me as the person dumped in the council flat. For *survival* is clearly and obviously piss easy. We don’t in fact get stories of people starving away on the dole. Nor of rotting corpses discovered in the spring as they unfreeze.

But everyone surviving on such sums is undoubtedly poor: by the JRF reckoning or just about any other you’d like to use in a rich society like ours (ie, any form of relative poverty, not the absolute poverty of Africa).

There is, however, a really interesting number behind the numbers they give above.

Total household income for the country is £750 billionish. Not accurate, but close enough. Imagine that everyone is a single adult (just to make the math easy for me). There’s 65 million people….ish.

So, let’s divide that £750 billion by 65 million and we get: £11,500.

What the JRF are proving is that even if we had an absolutely equal distribution of household income then all of us would be poor.

Which is a very interesting fact, no?

(These numbers could do with some work I agree, but I’m not going to go through all of that for a blog comment).

@6 Tim Worstall

Did you read the article? It says £18k is the minimum for a family of four. Your analysis is sub-literate and ridiculous. Learn to read.

“It says £18k is the minimum for a family of four. Your analysis is sub-literate and ridiculous. Learn to read.”

Compare and contrast with:

“For a family of four, the wage needed has risen to £18,400 per year before tax for each parent (assuming that both of them work full-time, and require childcare).”

18 k *per parent* is what the article says.

@ 34 Tim Worstall

“Ah, no, you’re misunderstanding the basis of the JRF estimates.”

I’m aware of the fact that it’s based on public perceptions, although the site also says that “experts” can adjust the results. It doesn’t seem to say how these “experts” go about doing this, or the exact question asked of respondents – was it the one in your post?

In any case, it’s not all that relevant. People above have claimed that they live on <£7,500, or £9,000 in London. Regardless of what JRF says, I find those claims surprising, and I'd be interested in hearing how they break down.

Chaise,
They’re lying or withholding important pieces of relevant information.

@chaise

I think the problem is the arguments only work in the abstract – claiming the MIS is far too high due to deliberate ignorance of the costs of living.

And it works – middle-aged homeowners do not appreciate how high housing costs for example.

I would, as I said, very much welcome a MIS developed by Tim Worstall et al as a valuable contribution to the debate

As a single adult living on around £15,000 pa I’d say that I’m comfortably well off. Compared with the figures they give for the various types of expenditure, I’m spending a lot less on food (despite having severe dietary restrictions), don’t spend anything on alcohol or fuel, spend a lot less on social life, and less on rent (despite occupying a two-bed maisonette all by myself). I’m also spending less on a few other categories (even adding my occasional train journeys to the cost of my bus pass, I’m well under the travel budget). On the other hand, I do spend quite a lot on charitable giving.

Which probably underlines Chaise’s point that there are almost certainly significant regional variations. Coventry’s bound to be below the national average in terms of living costs.

Hi again.

Nearly all MIS levels are well below median income for that family type, so the total cannot be more than national household income by definition.

MIS costs are based on prices in mainstream supermarkets mostly and for things like rent, what it costs for council housing in the East Midlands, not the average for the UK.

The clue is in the title really – it’s about a minimum rather than catering for every need. And certainly the point is that if you reach it you have enough – the people living consistently far below the MIS level are what should be of concern.

Thanks, Chris.

What these types of articles fail to take into account is the following scenario that happened to me.
I live on my own and brought a house 12 years ago when I was earning decent money. I built up a few credit card debts – nothing major – and I was managing to pay them off on my good wage (£27,500 per annum. Not a massive income by some standards but certainly comfortable).
Then the recession hit. I got made redundant. I got a temp job paying £22k a year and tightened my belt. Then came the cuts and I lost my job again.
I now earn £17.5k a year, still have the same outgoings of mortgage, household bills that are getting more expensive, food bills going up and the credit card debts to pay off. That takes up the entire £17.5k so I have to do cash in hand cleaning on Saturdays for £30 to buy my food and petrol. That is the only ‘disposable income’ I have and seeing as it has to go on food and petrol – necessities – it’s hardly disposable is it? I work a 48 hour week and am living below the poverty line. I can’t afford the dentist, don’t qualify for any help with anything and can’t even afford to cash a prescription when I go to the doctor.
How I love hearing about bankers getting their bonuses and politicians talking guff about us ‘being in this together’.
They are sadly out of touch with most people – and so is the £18 estimate. I really struggle to feed myself some weeks.