Nick Clegg referred to such a group as “alarm clock Britain – the bleary-eyed grafters struggling to raise families, while getting out to work, with little money left over to pay for luxuries.”
Resolution Foundation thinks tank suggest there are six million working-age households on low to middle incomes spread across the country. Such households will have at least one person in work, but they are not always low-income families. They may, for example, have an annual income of £50,000 but have a large family to support with high housing cost and very little disposable income at the end of the month.
Although most of the income for JAM families comes from work, it is, in many cases, topped up by welfare support. Two-thirds of all families receiving children tax credit are JAM families. Home ownership for people in this group fell from 59 per cent to 26 per cent last year pushing many of them into long term rental tenancy. The reason for this fall was that they were using 25 per cent of their income for housing over a decade where we had little or no income growth. The cap on benefits has also adversely affected housing benefits up to £100 a week. Since 2010 housing benefits have not risen in line with private rents and current benefits will remain frozen at 2016 levels until 2020. On top of all this is the increases in living costs and the very low if any pay rises – to stay as they are JAM families have to find hundreds of pounds extra for rents.
Many families like these fall back on payday loans and credit card and end up trapping themselves in loans they effectively can’t pay off.
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