JRF: Incomes not high enough

11 July 2012

Products such as equity release could be set to become more popular in the future after research by the Joseph Rowntree Foundation (JRF) revealed working families with children in the UK are not receiving a high enough amount of income.

Data collected by the body revealed families believe they need a third more than their current budgets if they are to be able to make ends meet in a satisfactory manner.

Since 2008, JRF's Minimum Income Standard for the UK report has tracked how much money members of the public think they need to earn for an acceptable quality of life.

Minimum amount

The minimum that a couple with two children now has to earn for an acceptable standard of living is £36,800, which is up by almost a third on the figure from four years ago and has risen at well above the rate of inflation.

It means many families are probably struggling to put money away into pension schemes, which means they may need to turn to equity release plans later in life in order to ensure they have enough cash to live on in their retirement.

Chief executive of the JRF Julia Unwin stated families in the UK are currently facing a "monumental" task just to "get by", adding: "Parents facing low wages and pressure on their working time have little prospect of finding the extra money they need to meet growing household expenses."

Dangerous cocktail

She added life is being made even harder for those close to the brink financially, due to what was described as a "dangerous cocktail" of "service cuts and stagnating incomes" that have been "keenly felt" by parents over the course of recent years.

Responding to the research, chief executive at Family Action Helen Dent said the data underlines what was already known about how people are finding it hard to make ends meet.

Those who want to learn more about lifetime mortgages could do so by using the equity release calculator from Key Retirement Solutions.