According to figures released by the Joseph Rowntree Foundation, the cost of living for people existing on minimum household income, is increasing faster than the rate of inflation.
This news has caused concern amongst debt management providers, worried that the most vulnerable members of society are also the most likely to be suffering with debt problems as well.
The foundation reported that costs for a household on a low-income budget had increased by 5.3% during this year, whilst the costs for families with children and old age pensioners had increased by 5%. They concluded the that major factor behind the statistics was that the less well-off spend a larger proportion of their income on public transport, fuel and food, which have all gone up by between 7% and 12%.
The report is intended to spark debate concerning the levels of poverty in the UK that fall beyond the government’s official poverty line, which are people receiving less than 60% of average earnings. They also hope to highlight the child poverty issue, as the government plans to set legally binding targets to reduce it by 50% before 2020.
The report points out that using this relative measure, poverty is likely to have reduced or stabilised this year, simply because in the recession average earnings have stopped growing whilst benefits have risen by 5% in April 2009 in line with the September 2008 inflation figure.
They claim that the figures are misleading, in that “this apparently beneficial effect on the poverty figures does not represent a real improvement in the living standards of people on low incomes”. This is because the cost of living, for consumers in low-income households, is rising faster than for the average family.
For low-income families, or those that are surviving on benefits, meeting debt repayments is becoming ever more difficult as their relative cost of living increases. It is recommended that these individuals seek free debt advice before their situation becomes impossible.
