Dramatic increases in prices over the last year present a sustained challenge to household incomes. These strains influence what people are able to do, shaping decisions about which areas of spending to prioritise, limiting choices, and ultimately affecting the extent to which people feel included in society. There continues to be a big gap between what people have and what they need for a decent standard of living. Millions of people in the UK risk falling well short of a minimum living standard. Costs continue to rise and our social security system fails to provide adequate, appropriate support. Support through the means-tested cost of living payments is welcome but does not go far enough. We urgently need a social security system that is fit for today and provides hope for tomorrow.

Key points and recommendations

• MIS continues to provide a unique and distinctive way through which to observe and track the impact of social, economic, political and cultural change on our shared vision for higher living standards, so we can all live with dignity in the UK.
• In 2023, we have updated MIS budgets based predominantly on price changes, as captured through the Consumer Prices Index (CPI). In updating budgets this year, we have also made use of the latest data on private rents and have recalculated domestic fuel costs rather than using CPI to uprate these categories.
• A single person needs to earn £29,500 a year to reach a minimum acceptable standard of living in 2023. A couple with two children need to earn £50,000 between them.
• The increase in what is needed to reach MIS over the past year has been driven by the rapidly rising cost of many goods and services. Increases in the cost of domestic fuel and food have had a notable impact.
• April 2023 saw an inflation-based increase in benefits of 10.1%, but this follows a year in which safety-net benefits saw their greatest fall in value since annual uprating began in 1972.
• The cost of living support payments, intended to help those households most likely to be impacted by rising costs, are welcome. But these payments do not begin to solve more deep-rooted problems with our social security system. Even with the cost of living support payments, a couple with two children, on out of work benefits, only have half of what they need for a minimum standard of living.
• Working hous