Matt Padley

This report, for the first time, looks in details at what households in Inner and Outer London need in order to reach an acceptable standard of living as defined by members of the public.  Based on detailed discussions with groups of Londoners about what goods and services households need to be able to buy, and how this differs from what people require in the rest of the country, the report compares the needs of households living in the capital with those living in urban areas outside of London.The report shows that households in London face different challenges in making ends meet compared to the rest of the UK.  Many additional costs in the capital are a result of higher prices, particularly relating to housing, public transport and childcare, but this is not the only source of extra costs.  The different infrastructure, different ways of living and higher prices in the capital combine to make London a more expensive place to live.  This means that Londoners need more than those living outside of London in order to reach a minimum socially acceptable standard of living.

The Minimum Income Standard research carried out regularly by CRSP involves detailed discussion among member of the public about what things are essential for a minimum acceptable standard of living.  This report sets out for the first time the details of how the groups reach consensus and what rationales they use to determine which items are included. Based on analysis of six years of MIS research, the report identifies the common themes that have emerged from the groups’ discussions, ranging from the need to have reasonable choices to the importance of living life in a practical way when time is scarce. For each area of household budgets, it explains how these rationales have guided decisions about what items people need to be able to afford.

This is the 2014 update of the Minimum Income Standard for the United Kingdom, based on what members of the public think people need for an acceptable minimum standard of living. Budgets for adults without children, both working age and pensioners, which were originally researched in 2008, have for the first time been researched again from scratch. Budgets for families with children have been reviewed. The report shows that a basket of minimum household requirements is similar in 2014 to 2008, but that its cost has risen significantly more than headline inflation, as have the earnings required to afford it.

This is the 2012 update of the Minimum Income Standard for the United Kingdom, based on new research into what members of the public think people need for an acceptable minimum standard of living. Budgets for families with children, originally researched in 2008, have for the fi rst time been researched again from scratch. Budgets for other household types have been reviewed. Overall, the report shows that in the past four years both minimum living costs and the earnings needed to aff ord them have risen signifi cantly more than headline infl ation for families with children. For households without children, they have remained more stable.

The Minimum Income Standards (MIS) method provides a greater insight into the additional costs of vision impairment and how they increase with severity of impairment and age.  The study shows that working age people who are severely sight impaired face 60% higher costs, and the costs for someone of pension age who is sight impaired can be 41% more than people of the same age who are not vision impaired.  The research funded by Thomas Pocklington Trust followed on from a previous study looking at the costs of someone of working age who is sight impaired, and calculates how much extra the different groups need to reach a minimum acceptable standard of living, compared to the standard MIS budgets:
    • Severely sight impaired (SSI) working age adult: an additional £116.43 per week
    • Sight impaired (SI) pension age adult: £75.39
    • This compares to £48.77 for a sight impaired (SI) working age adult, showing that both severity and life stage greatly affect costs.

The findings also highlight the broad range of additional costs that people who are vision impaired face which include direct aids to help with sight loss, services at home and additional lifestyle related costs outside of the home such as for social interaction and travel, and that there are similarities as well as differences in needs and costs when severity of impairment and age are taken into account.

Both the statutory inquiry into the tragic death of Victoria Climbié, 2003, and the first joint Chief Inspectors' Report on Safeguarding (Chief Inspector of Social Services et al., 2002) emphasise the importance of effective joint working between agencies and professionals to safeguard children from harm and to promote their welfare.

There is growing concern about a ‘crisis’ in housing affordability in the UK, renewing longstanding debates about what constitutes ‘affordable’ housing. The growth of the private rented sector as a source of housing for low income households has also led to increased interest in understanding the impact of housing costs on living standards, and to calls for a ‘Living Rent’. In this context, this paper builds on existing work on ‘residual income’ measures of housing affordability, accepting that what households can afford to pay for housing depends not just on their income but also on their other spending requirements. It proposes a new approach to defining and measuring housing affordability, based on the Minimum Income Standard (MIS).The paper uses the latest Family Resources Survey to examine the housing affordability across the UK and within London, and considers the impact of one model of Living Rents on affordability and living standards.

The past few years have seen growing concerns over the ‘crisis’ in housing affordability, for both renters and home owners, renewing longstanding debate about what constitutes ‘affordable housing’.  Alongside this, there is keen interest in understanding the impact of housing costs on living standards, particularly with the growth of the PRS as a source of housing for low income households. Currently the term ‘affordable’ in the UK generally means housing available at ‘below market value’ rather than resting on any considered assessment of what its inhabitants can afford. In this context, the paper builds on the work of Stone (2006) and others on ‘residual income measures’ of housing affordability, accepting that what households can afford to pay for housing depends not just on their income but also on their other spending requirements. We propose a new way of defining housing affordability for renters, built on an established and regularly updated measure of non-housing costs (or residual income), the Minimum Income Standard (MIS). The paper outlines our approach, and uses the latest Family Resources Survey to examine housing affordability across the UK and within London. It concludes by looking at how this new approach might be used to inform the setting of rents at an ‘affordable’ level – or what has come to be called a Living Rent.