Can you survive on the minimum wage? (Adam Teladia)

Can you survive on the minimum wage?

January 11, 2012 12:01 AM

Felicity Hannah Yahoo! Finance's money-saving columnist published Can you survive on the minimum wage? In December, I recently read the article and found some interesting facts which I think I'll be thinking about when I'm looking at cutting my budgets.

Felicity Hannah says "If you're working a 35-hour week on the new minimum wage, you'll earn just over £11,000 a year - or £212 a week" however what she does not mention is that £212.80 will be the Gross Wage, £14 of which will be paid as Tax and the National Insurance Contributions on that salary would be £9 therefore the Take-home pay would only be £190. If someone on the Minimum Wage had to repay a Student Loan they wont be contributing to that at this stage as they were under the threshold however they could have a Pension to contribute to.

Buying supermarket-own products rather than brands is an obvious just as an example if look at Jaffa Cakes, Tesco Value Jaffa Cakes 24Pk cost £0.79 (£0.03/each), Tesco Jaffa Cakes 36 Pack cost £1.67 (£0.05/each) and Mcvities Jaffa Cakes Triple Pack 36S cost £3.09 (£0.09/each). The cost of each Tesco Value Jaffa Cake is a third of the Mcvities Jaffa Cake.

Felicity Hannah also mentions not being able to choose more ethical products. Fair-trade fruit and tea being too expensive and not being able to afford high-welfare meat when you are looking to cut your spending this would be obvious and I have spent time looking at what I can do without entirely.

In Can you survive on the minimum wage Felicity Hannah also mentions how her husband decided to cycle into work and she left the car at home and walked while getting to places may take a lot time walking will help keep car fuel costs down and help keep people more active.

Felicity Hannah mentions that they did find several free ways to enjoy ourselves, I'm not sure most people could say that. A lot of people could find several free things to do but they wouldn't always enjoy ourselves doing these things.

My greatest fear of living on a budget similar to the minimum wage is as Felicity Hannah mentions not being able to save "any money for emergencies or annual expenses like insurance policies" with car insurance being so expensive I would be particularly concerned about being able to pay for that on such a tight budget. Reading this article helps me understand why people may end up getting into debt on their credit cards which could lead them to more problems later as they find themselves having to pay fees and interest for not clearing their debts.

I would strongly encourage all political parties to look at raising the national insurance and income tax thresholds so that those on the minimum wage do not pay any national insurance and income tax. By 2020 the end of the next parliament the minimum wage could be around £7.23 an how so on an 37.5 hour week an annual salary of someone on the minimum wage be around £14'098.