Eccount can help families reach minimum income standard

Recent analysis showed there was an urgent need for tools helping families meet their financial goals, eccount Money’s Will Thomas has said. His statement came as a response to a report by the Joseph Rowntree Foundation, which claimed that a family consisting of two parents and two children needed to earn at least £36,800 to support itself.

Minimum Income standard report

The 52-page report, co-penned and edited by Donald Hirsch, the foundation’s Head of Income Studies, and titled “A minimum income standard for the UK in 2012”, arrived at its conclusions on the basis of a recent study with 21 new focus groups. The results, according to the reports’ authors was clear: The cost of living had considerably gone up in some areas, implying a higher barrier to a socially acceptable lifestyle. Since wage growth had not kept up with these developments, new solutions to help families with meeting their financial goals, were required, as Will Thomas of eccount money stressed :

“The report by the Joseph Rowntree Foundation has given us all a lot to think about. It may certainly be debatable whether or not all of the items and services mentioned in the paper should truly be considered ‘essentials’. But there can be no doubt about the fact that the divide between an average person’s ability to attain a reasonable living standard and their actual monetary means has grown and is still continuing to grow. The key to resolving this dilemma is not to search for it exclusively in the area of wage growth – but foremost in better tools for debt prevention and budgeting.”

Is minimum income an adequate standard of living?

On the one hand, the report acknowledged that there was a clear sign of continuity:

“The most important finding was that there has been a high degree of continuity in what the public consider to be an adequate standard of living, despite unstable economic times. The great majority of items in essential baskets of goods and services were very similar in this study to the original research carried out in 2007/8. Hard times do not appear to have caused the British public to rethink fundamentally what households need in order to meet a minimum socially acceptable standard of living.”

According to “A minimum income standard for the UK in 2012”, there were, however, a few new core issues to the problem.

  • For one, a combination of rising costs in childcare and transport on the one hand and a plethora of incisive cuts in tax benefits for families on the other have sent families’ earnings falling and their needs soaring – sometimes by as much as 16 per cent above inflation since the start of the recession.
  • Secondly, bus fares had all but doubled since the end of the 90s, while access to public transport had been cut down, which meant that for many families with children, a car had become a necessity.
  • And finally, technological change had brought about a paradigm shift with regards to the importance of high-quality, cutting-edge technology. Today, Internet-access and up-to-date computers were no longer an option, but in fact mandatory.

How can Eccount help families reach minimum income standard?

The report was quickly criticised by many as posing inadequate questions and arriving at “silly” answers. In fact, the answers given in the study revealed a lot of highly valuable insights and pointed at the fact that not only were UK households clearly responding to the challenges posed by changing markets. But that they were in fact very much interested in constructive solutions to their problems. Will Thomas had one to offer:

“The precise amount of money required by single persons or families with children isn’t the actual point of the report. What it is about, really, is defining what one considers essential in life and than comparing this to one’s actual financial capabilities. One way of aligning the two is reducing your debt to zero and to use software tools that can help you improve your budget – and an eccount is perfect for this.”

Apply today for your Eccount to start managing your finances. Reaching your minimum income standard is only a small and essential part of our service.