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Couple With Two Children 'must Earn £40,600 To Meet Basic Needs'

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http://www.theguardian.com/money/2014/jun/30/couple-two-children-earn-basic-needs

A couple with two children needs to earn £40,600 to have an acceptable standard of living, almost 50% more than before the recession, according to a report that highlights the squeeze on families from soaring energy bills and benefit cuts.

The Joseph Rowntree Foundation (JRF) said its latest research into what the public considered essential to reach a minimum acceptable standard of living showed a growing gulf between what people needed to earn and their actual incomes.

While the amount needed to cover a family's basic needs had risen 46% since 2008, average earnings had risen only 9% in that time, the charity said. On top of that many families had lost out because of changes to tax credits and benefits.

JRF warns that even if real wages start to rise again this year, low-earning families with children are unlikely to be able to close the gap between their income and their needs, because of low pay, rising prices and reduced government support.

"People have talked a lot about wages falling behind the cost of living but this really lays bare the challenge to make up lost ground. This isn't just falling short, it's falling behind," said Katie Schmuecker, a programme manager at JRF.

An acceptable standard of living compared to whom? Compared to many in the developing world the standard of living in the UK is incredible high.

Edited by interestrateripoff

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They conduct a survey to determine what the public considers an acceptable standard of living. It's a bit like conducting a survey to determine what should be in the inflation basket, and so should come up with a figure much closer to what people "feel" inflation is rather than what the government data says it is.

I haven't looked at one of the reports in detail for ages, but if you look at the data you should be able to find out how much of that 50% increase comes from rising expectations rather than rising prices or benefit cuts.

It's a useful study, but you always have to view it as much as a survey of public opinion rather than as real economic data.

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Well, speaking as half of a couple with 2 children.. a MSE style statement

(Monthly)

Mortgage £850

Council Tax £150

Gas/Electric £90

Phone/Broadband £30

Cars(2) Keeping on road (servicing+tax) £80

Insurances £200

Water £40

Fuel £160

Food+consumables £700

Minimal cash savings (to replace big ticket items) £200

=£2500

Which is indeed equivalent to about £40k, but would be desperately tight.

Problem is, it would be possible to cope on less than that, but you'd find that 'unexpected' items resulted in credit card bills that never quite got paid off before the next one turned up. Or you find that you can stick to a lower consumables budget for a couple of months, then clothes need buying and stuff starts running out..

Anyway, as far as the article goes then yes, you need that much for a fairly basic lifestyle nowadays.

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That figure looks reasonable to me. A lot of people that don’t have kids have no idea of how much a financial strain it can be; friends of mine hark back to their upbringing in the 70’s where they wore hand-me-downs and entertained themselves by playing football in the park every day and ask why can’t kids today do that…. The fact is if you brought your kids up in a 1970’s way today you’d probably be prosecuted for child neglect LOL

This week kids’ diary :

School summer fair

Village summer fair

Cubs

Scouts

School play performance X2

Dance class

Spanish

Extra maths tuition

Piano X2

Tennis club

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Well, speaking as half of a couple with 2 children.. a MSE style statement

(Monthly)

Mortgage £850

Council Tax £150

Gas/Electric £90

Phone/Broadband £30

Cars(2) Keeping on road (servicing+tax) £80

Insurances £200

Water £40

Fuel £160

Food+consumables £700

Minimal cash savings (to replace big ticket items) £200

=£2500

Which is indeed equivalent to about £40k, but would be desperately tight.

Problem is, it would be possible to cope on less than that, but you'd find that 'unexpected' items resulted in credit card bills that never quite got paid off before the next one turned up. Or you find that you can stick to a lower consumables budget for a couple of months, then clothes need buying and stuff starts running out..

Anyway, as far as the article goes then yes, you need that much for a fairly basic lifestyle nowadays.

This could be me!

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Well, speaking as half of a couple with 2 children.. a MSE style statement

(Monthly)

Mortgage £850

Council Tax £150

Gas/Electric £90

Phone/Broadband £30

Cars(2) Keeping on road (servicing+tax) £80

Insurances £200

Water £40

Fuel £160

Food+consumables £700

Minimal cash savings (to replace big ticket items) £200

=£2500

Which is indeed equivalent to about £40k, but would be desperately tight.

Problem is, it would be possible to cope on less than that, but you'd find that 'unexpected' items resulted in credit card bills that never quite got paid off before the next one turned up. Or you find that you can stick to a lower consumables budget for a couple of months, then clothes need buying and stuff starts running out..

Anyway, as far as the article goes then yes, you need that much for a fairly basic lifestyle nowadays.

The HPC skinflinteratti can obfuscate about what constitutes basic needs but the underlying principle is clear. It is becoming hard and harder to get by in the face of declining real wages and rising real costs.

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The HPC skinflinteratti can obfuscate about what constitutes basic needs but the underlying principle is clear. It is becoming hard and harder to get by in the face of declining real wages and rising real costs.

The problem is mortgage costs, it's fixed and is very difficult to lower. Even for those renting lowering it will mean finding somewhere new to live which if you have got children may mean new school and new area.

Housing isn't the problem... :ph34r:

Again you have other fixed costs which can't be lowered ie council tax. The economy is being more and more skewed towards high cost items which is reducing disposable incomes.

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It is not the high cost of living that is the problem, it is the cost of high living.

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The HPC skinflinteratti

LOL great term! People often forget the economy is there to serve us not us it! There are people in the community who can teach kids great things like dance, languages, piano etc... and now that we have technology that is highly efficient at providing our basic needs, these people can be liberated from the fields or factory floor and use their talents... This is how it should work...

We could all wear hard wearing uniforms, sleep in barracks and eat porridge, rice and beans to reduce costs but what sort of life would that be.

Edited by PricedOutNative

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It is not the high cost of living that is the problem, it is the cost of high living.

High living?

Rent on a 3 bed semi in an ok part of a provincial town is £9,000 per annum. Add that to council tax (£1,400), utilities (£1,000) and the cost of running a 17 year old car for 12,500 miles per annum (£3,000). Food is around £3,000 p.a.

That eats up a salary of £21k gross, which is approximately the UK median earnings.

No clothes, entertainment, healthcare, activities, holidays etc, just staying alive.

Edited by Joan of The Tower

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Our monthly outgoings total about £1300 a month (family with 2 children under 7), but to be fair we do seem to live quite frugally compared to a lot of people we know. We don't really go without though, the kids attend karate and dancing, and we have family days out now and again, and days at the park most weeks (weather permitting). I guess I don't believe in throwing money away on things that arent really important. Or maybe I'm just a tight bugger, must be my yorkshire blood :P

Although I can see where housing costs come into it, my rent is only £342 a month at the moment, I can see people paying 3 times that every month on rent/mortgages, and we just couldn't afford that.

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Well, speaking as half of a couple with 2 children.. a MSE style statement

(Monthly)

Mortgage £850

Council Tax £150

Gas/Electric £90

Phone/Broadband £30

Cars(2) Keeping on road (servicing+tax) £80

Insurances £200

Water £40

Fuel £160

Food+consumables £700

Minimal cash savings (to replace big ticket items) £200

=£2500

Which is indeed equivalent to about £40k, but would be desperately tight.

Problem is, it would be possible to cope on less than that, but you'd find that 'unexpected' items resulted in credit card bills that never quite got paid off before the next one turned up. Or you find that you can stick to a lower consumables budget for a couple of months, then clothes need buying and stuff starts running out..

Anyway, as far as the article goes then yes, you need that much for a fairly basic lifestyle nowadays.

Food bill a tad high! Are they obese? Eating out every night? Heavy alcohol drinkers?

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Food bill a tad high! Are they obese? Eating out every night? Heavy alcohol drinkers?

Ours comes in at about £700 also, that's a combination of Sainsburys, Costco & Aldi....

Could economize a bit but we all have priorities; good quality: Sunday roasts, poultry through the week, packed lunch stuff, fruit and veg, the odd treat, although maybe more alcohol than average: several bottles of beer and three bottles of wine...

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Well, speaking as half of a couple with 2 children.. a MSE style statement

(Monthly)

Mortgage £850

Council Tax £150

Gas/Electric £90

Phone/Broadband £30

Cars(2) Keeping on road (servicing+tax) £80

Insurances £200

Water £40

Fuel £160

Food+consumables £700

Minimal cash savings (to replace big ticket items) £200

=£2500

Which is indeed equivalent to about £40k, but would be desperately tight.

Problem is, it would be possible to cope on less than that, but you'd find that 'unexpected' items resulted in credit card bills that never quite got paid off before the next one turned up. Or you find that you can stick to a lower consumables budget for a couple of months, then clothes need buying and stuff starts running out..

Anyway, as far as the article goes then yes, you need that much for a fairly basic lifestyle nowadays.

Also agree that's realistic, although your 2 cars seem cheap if it's £80 all in? My one averages at £100pm (car tax, insurance, 1 full service a year, breakdown cover, MOT and ad hoc repairs). Only observation is pensions? That's another huge chunk of money if people are supposed to be hitting the 17.5k bullsh*t government target.

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High living?

Rent on a 3 bed semi in an ok part of a provincial town is £9,000 per annum. Add that to council tax (£1,400), utilities (£1,000) and the cost of running a 17 year old car for 12,500 miles per annum (£3,000). Food is around £3,000 p.a.

That eats up a salary of £21k gross, which is approximately the UK median earnings.

No clothes, entertainment, healthcare, activities, holidays etc, just staying alive.

A 3 bed semi is average, not "basic needs". Entertainment can be very cheap, for example visiting the library and going to the park is free. Holidays are not a basic need. The study also includes 2 cars. That is a luxury. Basic needs transport in my book is cycling and using the bus when it rains or is too cold.

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The problem is mortgage costs, it's fixed and is very difficult to lower. Even for those renting lowering it will mean finding somewhere new to live which if you have got children may mean new school and new area.

Housing isn't the problem... :ph34r:

Again you have other fixed costs which can't be lowered ie council tax. The economy is being more and more skewed towards high cost items which is reducing disposable incomes.

You mean like this?

(although looking at that now I think I might have got my weeks and months mixed up for food.)

But basically most of your income goes in tax. Calling a chunk rent or mortgage is just splitting hairs

Income Tax and National Insurance £800 a month

Rent £700 a month

Pension £150 a month

Petrol £150 a month

Council Tax £110 a month

Food £100 a month

Woohoo I saved a tenner a month at the barbers...

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This could be me!

HPI accounts for the biggest single payment...the whole idea of lowering rates was to bring down how much of the monthly income was swallowed up...but no, the stupid just upped their mortgages.

Life neednt be a struggle...its just that we seem to enjoy it.

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That figure looks reasonable to me. A lot of people that don’t have kids have no idea of how much a financial strain it can be; friends of mine hark back to their upbringing in the 70’s where they wore hand-me-downs and entertained themselves by playing football in the park every day and ask why can’t kids today do that…. The fact is if you brought your kids up in a 1970’s way today you’d probably be prosecuted for child neglect LOL

This week kids’ diary :

School summer fair

Village summer fair

Cubs

Scouts

School play performance X2

Dance class

Spanish

Extra maths tuition

Piano X2

Tennis club

The thing is in the 70s parents didn't have the money to pay for all these extra activities....so they didn't exist, we had the youth club, cubs and brownies and football/games in the park....most extras were free or 5p entrance.....we made our own entertainment, bus ride to the markets or lido, building dams in the brook and swings over the brook, also camps in the woods.....no mobile phones, took plenty of risks...kids then were allowed to take risks....and they walked to school crossing busy main roads heaven forbid. ;)

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http://www.theguardian.com/money/2014/jun/30/couple-two-children-earn-basic-needs

An acceptable standard of living compared to whom? Compared to many in the developing world the standard of living in the UK is incredible high.

The Joseph Rowntree Foundation has history on this. Some cloud-cuckoo-land figures (who do they think pays £52.80/week rent?)

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That figure looks reasonable to me. A lot of people that dont have kids have no idea of how much a financial strain it can be; friends of mine hark back to their upbringing in the 70s where they wore hand-me-downs and entertained themselves by playing football in the park every day and ask why cant kids today do that. The fact is if you brought your kids up in a 1970s way today youd probably be prosecuted for child neglect LOL

This week kids diary :

School summer fair

Village summer fair

Cubs

Scouts

School play performance X2

Dance class

Spanish

Extra maths tuition

Piano X2

Tennis club

My children's list:

School fun day

Theatre group

Swimming * 3

Guides

Brownies

Piano * 2

Party

They have more activities than I ever did.

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That figure looks reasonable to me.

The fact is if you brought your kids up in a 1970’s way today you’d probably be prosecuted for child neglect LOL

That's because you are, by any historical or world standard, very, very, very rich.

By 1970s standards that lifestyle would put you not merely in the top 1%, but high up within that 1%.

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That's because you are, by any historical or world standard, very, very, very rich.

By 1970s standards that lifestyle would put you not merely in the top 1%, but high up within that 1%.

.....when all around you have the same or similar you feel as rich as them......rich means having enough and having equal opportunity in comparison to others to gain more when and if you want more......nobody cared what brand trainers you wore or what job your friends parents had or even what school your friends went to because that didn't matter...how well you did was down to you not what influence and money could buy you. ;)

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My children's list:

School fun day

Theatre group

Swimming * 3

Guides

Brownies

Piano * 2

Party

They have more activities than I ever did.

Not surprising, nearly all of us parents had fewer activities than our children do, then again we have more freedom...

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