FAMILIES are still struggling to cover their essential costs despite a welcome pause in the rise of the cost of living, according to new research by the York-based Joseph Rowntree Foundation.

Researchers found the gap between people’s incomes and the amount they need to cover costs had widened dramatically since the recession began in 2008.

A Minimum Income Standard (MIS) for the UK, funded by the foundation, is calculated annually by Loughborough University’s Centre for Research in Social Policy.

This year’s analysis finds that for the first time since 2008, the amount families need to earn to reach a minimum, socially acceptable standard of living has fallen because of low and negative inflation.

Additional factors helping to narrow the gap between earnings and outgoings for many low income households in the last year, bringing welcome respite, included an increase in the personal tax allowance, uprating of out-of-work benefits by 1 per cent and slightly above inflation increases to child benefit and tax credits

Foundation chief executive Julia Unwin said that after seven years of declining living standards, the pause in rising costs was a very welcome respite, but many low income households were still much worse off than in 2008, leaving them struggling to make ends meet and reliant on benefits to top up their incomes.

“A couple with two children who each earn the minimum wage faces a shortfall of almost £4,000 a year between their incomes and what the public say they need for a minimum standard of living."

To help narrow the gap, the foundation is calling for action to boost productivity, creating better paid, secure and flexible jobs for people on low incomes, employers to pay the Living Wage where affordable and a greater supply of genuinely affordable homes.