FOUR million more people are only 'just about managing' as prices rise and incomes stagnate, a report by the York-based Joseph Rowntree Foundation has revealed.

The report warns that millions of families are on the tipping point of falling into poverty, with forecasts showing the cost of living could rise 10 per cent by 2020 when state support through tax credits and working age benefits is frozen.

Research for the foundation sheds light on how different kinds of household are faring, against the Minimum Income Standard - a benchmark of income adequacy as defined by what the public think is needed for a decent living standard.

Prime Minister Theresa May has previously spoken out about people in the UK who are "just about managing" and said she will tackle the problem.

The foundation said that between 2008/9 and 2014/5, based on the latest available data, the number of individuals below MIS rose from 15 million to 19 million, and there are 11 million people living far short of MIS, with incomes below 75 per cent of the standard.

It said the growing risk of low income was not due to an increased risk of unemployment, but a growth in the risk that working people would have a low income. "It shows how record employment in the economy on its own is not enough to help families reach MIS."

Chief executive Campbell Robb said the 'stark figures' showed just how precarious life could be for many families.

"Government focus on people on modest incomes is welcome, but it cannot be at the expense of those at the poorest end of the income scale: it must remember just about managing today can become poverty tomorrow.

“This could be a very difficult time for just managing families as rising inflation begins to bite into finely-balanced budgets.

"The high cost of living has already helped push four million more people below an adequate income, and if the cost of essentials such as food, energy and housing rise further, we need to take action to ease the strain."

He said the Government could help in next month’s Budget by allowing families to keep more of their earnings and ensuring benefits and tax credits kept up with the rising cost of living.