Six million UK families struggle financially as costs of housing and childcare soar
Families who find it difficult to make ends meet are said to earn an average annual income of £22,800
SIX million families are “just managing” to get by as they battle a pay squeeze, soaring housing and childcare costs, a think tank claimed last night.
The Resolution Foundation laid bare the scale of the challenge facing Theresa May by revealing the number of hard-working Brits the PM vowed to help when entering Downing Street in July.
It said there were six million families – working age households on low to middle incomes – spread right across Britain and concentrated in areas as diverse as Pendle in Lancashire to Sandwell in the Midlands and North Devon.
All of them have at least one person in work, most work full-time but they are under-represented in higher paying jobs.
But Resolution said almost all have less than a month’s saving – and housing costs now account for 24 per cent of their annual income as more than half are forced to rent.
Theresa May vowed to help those “just managing” in a passionate speech on the steps of Downing Street when she became Prime Minister in July.
Insiders are expecting her to announce a wave of social reforms at the Tory conference this weekend – including price controls in the energy sector.
But Resolution warned its report proved how deep-rooted the problems were.
David Finch, senior economic analyst said: “Millions of ‘just managing’ millions of households have seen their household finances stretched over the last decade.
As well as experiencing an unprecedented squeeze on their earnings, many have found it near on impossible to get on the housing ladder.
“Many of the problems families face are very deep rooted. Reversing these family misfortunes is a huge task.”
Resolution said that despite accounting for a third of the working population, just one in five professional roles were taken by employees from the “just managing” households.
The report added that many had seen their take home pay fall since the credit crisis due to rising inflation and cuts to benefits.
Resolution said that a typical couple with a baby, with one of them in full-time low paid work was 4 per cent worse off than in 2008.
Rising house prices have also pushed home ownership out of reach for many of the “just managing” households.
Home ownership among the six million families has fallen from 59 per cent in 1995 to 26 per cent today.
Over the same period private renting has soared from 22 per cent to 56 per cent.
The report came as the Centre for Social Justice revealed the bombshell Brexit vote was fuelled by “poorer” and “less-well educated” voters.
It added that the majority of workless Brits backed Vote Leave and 62 per cent of those were on incomes of less than £20,000 a year.
Only 35 per cent of those earning £60,000 or more voted to quit the EU, the CSJ said.