Loughborough University, Centre for Research in Social Policy

Cost of living for those on low incomes






August 2022 - January 2023




Project summary

Develop a Decent Living Index, which better reflects inflation changes for those living on low-to-middle incomes.


The return of substantial inflation is heralding a new crisis in living standards as incomes fail to keep pace with rising living costs. Yet to tackle this problem for people on low-to middle incomes, we need to know not just the general rate of inflation but also how much more expensive life is becoming for these groups. High increases in some of life’s essentials – notably food and fuel – could mean that groups whose consumption is concentrated on these essentials will see overall costs rising faster than the basket of goods and services used to construct the Consumers Prices Index (CPI).

The CPI basket is weighted according to average consumption across the population, rather than focusing just on essentials such as food, heating and clothing. It therefore includes a wide variety of goods and services purchased by most households, including leisure goods and services, but does not have a focus on those living on lower incomes.

A new inflation index will be piloted which will examine price changes for those living on a minimum income standard.

Project overview

Since 2008, the Centre for Research in Social Policy at Loughborough University has been calculating such a minimum – the Minimum Income Standard (MIS) –  based on a basket of goods and services constructed by groups of members of the public on the basis of what people need to meet their material needs and participate adequately in society.

The project will:

  • develop and demonstrate a means of monitoring, on a monthly basis, the annual increase in the cost of a minimum, decent standard of living, to construct a Decent Living Index;
  • report recent results of this index, drawing comparisons to the overall inflation rate (CPI);
  • assess how this index can best be calculated on an ongoing basis, and if feasible, creating automated tools for doing so.