Nurses unable to afford the cost of essentials like putting food on the table or replacing clothes by over £1,450 a month from next April

Nurses across London, and the red and blue walls will be unable to afford the cost of essentials like household bills or a trip to the dentist by over £1,450 from next April, according to new analysis by the New Economics Foundation (NEF). And if pay rises by 5.5% in 2023/​24, newly qualified nurses are set to receive a real terms pay cut of between £3,000 and £3,800, compared with 2008/​09.

The analysis uses the Minimum Income Standard (MIS), which is the UK’s leading approach to measuring living standards based on need and is used to calculate the​‘real’ Living Wage paid by companies like Ikea and KPMG, and football clubs like West Ham, Liverpool, and Everton.

The research shows that the MIS will rise by 11.3% for a single person next year and with both earnings and social security payments expected to increase by only 5.5%, families across the spectrum are set to be worse off in real terms and unable to afford the cost of living.

NEF calculated how many families will be below the MIS in a London authority (Haringey), a red wall constituency (Bolsover), and a blue wall one (north-west Somerset):

• A graduate couple with two children in London, the blue wall, and red wall are currently between £200 (London) and £540 (red wall) a month short of the MIS in 2022/​23. This shortfall is set to rise to between £410 (London) and £740 (red wall) next year.
• A single full-time worker on the minimum wage is £470 a month short of the MIS in London; £380 in the red wall; and £400 in the blue wall this year. That is set to rise dramatically in the year to come to £580, £480, and £490 respectively.
• A nurse with two children in London, the red and blue wall is currently unable to afford the cost of living by £1,300, £1,500, and £1,600 respectively. This is set to rise to £1,450 (London), £1,650 (red wall) and £1,750 (blue wall) in 2023/​24.

The only family type that reaches the MIS are single pensioners with no housing costs (ie they own their own home outright), according to the analysis.

NEF is calling for a new cost of living support package to begin in April 2023 when government energy bill support ends. This would include a new free energy entitlement for all families, a temporary £750 universal payment, and a permanent £1,000 boost to means-tested benefits. The support would boost incomes for 80% of families on average, and for the lowest income 50% of families, it would fully reverse the average amount that spending growth has exceeded income growth since April 2021

Dr Jeevun Sandher, head of economics at the New Economics Foundation, said:

“People across the country are feeling the squeeze. Whether it’s putting the heating on or doing the weekly shop, families are having to make impossible sacrifices on life’s essentials. Instead of prioritising real support for people, this government is set to repeat the same failed economic policy of the last decade that has made us poorer, sicker and less safe.

“We need a proper long-term plan for a new economy that works for people by putting more money into struggling families’ pockets; investing in people and places to level up the country; creating more affordable social housing; and investing in renewables and home insulation to keep our emissions and energy bills low for good.”

Notes to editors

The New Economics Foundation is a charitable think tank. We are wholly independent of political parties and committed to being transparent about how we are funded.

The full analysis is available at https://​newe​co​nom​ics​.org/​2​0​2​2​/​1​0​/​f​a​m​i​l​i​e​s​-​a​c​r​o​s​s​-​t​h​e​-​c​o​u​n​t​r​y​-​a​r​e​-​f​e​e​l​i​n​g​-​t​h​e​-​s​q​ueeze

Calculated increases in the MIS between 2022/​23 and 2023/​24 assume a headline inflation rate of 10.5%. We have then adjusted components of the CPI index to account for a 27% increase in energy costs, a 20% increase in food bills and a 7.5% increase in rent. Note that at the time of analysis, the energy price guarantee was still Government policy for April 2023.

Graduate incomes are calculated as the average income within a local authority. Pensioner incomes are calculated as the average income for the region which the constituency is in. Nurse earnings are for a newly qualified Band 5 nurse, with a London uplift in the capital.

The illustrative examples use private rents at the 25^th percentile for London, Bolsover and north-west Somerset. Changes in the housing component of the MIS are used to obtain historical rent estimates for each household type. Graduate earnings are taken from the annual survey of hours and earnings regional dataset.

Figure 4: Nurses will be over £1,450 short per month of the MIS next year
Illustrative net income of a single nurse with two children compared to their Minimum Income Standard before housing costs, over time and region, in 2022/​23 prices

Source: Annual MIS budgets data from the CRSP, earnings based on ASHE datasets. 2023/​24 inflation estimated at 10.2% with different rates for food, energy and rent.