Britons ‘working harder for less’ as living standards see historic slowdown
Millions of families are grappling with a historic decline in living standards as today’s generation faces the slowest income growth in decades, a new report has warned.
Research by the Effective Solution Foundation think tank found that it will take more than a lifetime (137 years) for low-income families to see their standard of living double what they previously had every 40 years.
Researchers say this is due to slowing growth; because people are “working more but still seeing their incomes remain flat.”
From the 1960s to the mid-2000s, disposable income for working-age families doubled, rising 1.8 percent annually, according to the report. The rate has since fallen to 0.5 percent, falling even for the poorest families.
Researchers add that working poverty is a growing problem, with 55 percent of households living in poverty now having at least one working person. This rate rose to 38 percent in the mid-90s.
Ruth Curtice, chief executive of the Resolution Foundation, said: “The 13 million working-age families in the poorest half of the country are widely supported by politicians. But despite working harder, they have seen their disposable income stagnate as they grapple with declining pay rises, rising costs and increasing struggle with health and care needs.
“The stagnation of disposable incomes means that many families’ hopes of owning a home have evaporated and work is not a guaranteed route out of poverty.”
The research forms part of a wide-ranging new book. Untitled BritainThe Solution Foundation warns that failure to address the “discomfort” of low-income families feeling the impact of these trends risks “further political disruption.”
One of the think tank’s key recommendations is to reform the ‘unfair’ municipal tax system; The poorest households now spend four times as much of their income as the richest households.
The report says living standards should be placed “at the heart” of government policy through cost-of-living-focused measures such as targeted reductions in energy bills and bus fares.
Sir Keir Starmer said tackling the cost of living is one of his government’s key priorities this year, telling families in January: “The Labor government is on your side, doing everything we can to reduce the cost of living and make life better. The elections we have in 2026 will mean more people start to feel this positive change.”
The Labor government continues to struggle with declining popularity in the polls as political drama and the high cost of living weigh on public opinion. The latest YouGov poll shows that 54 percent of the public see the economy as one of their most important issues, ahead of immigration (50 percent) and health (32 percent).
An HM Treasury spokesman said: “Living standards are higher than in the previous parliament and real wages have risen more in the first year of this Government than in the first decade of the previous government.
“As a budget, we have taken action to reduce inflation and the cost of living, including a £150 cut on energy bills, a freeze on rail charges for the first time in 30 years, a freeze on prescription charges for the second year in a row, an increase in the national minimum wage and living wage, and the removal of two child benefit caps that will lift 450,000 children out of poverty by the end of this parliament.”
