British Households Confront Historic Slowdown in Living Standards
A groundbreaking report has exposed a historic decline in living standards across Britain, with today's generation experiencing the slowest income growth witnessed in decades. The research indicates that millions of families are grappling with this unprecedented economic challenge, fundamentally altering expectations of prosperity.
Working Harder for Less: The Stagnation Reality
The influential Resolution Foundation think tank has published alarming findings showing that lower-income families would now require more than a lifetime – specifically 137 years – to achieve the doubling of living standards that previous generations enjoyed every 40 years. This dramatic slowdown represents a seismic shift in Britain's economic landscape.
Researchers attribute this trend to slowing economic growth, noting that people across the country "are working harder but seeing their incomes stagnate nonetheless." The data reveals a stark contrast between economic eras: from the 1960s to the mid-2000s, disposable income for working-age families doubled with annual growth of 1.8 percent. Since that period, growth has plummeted to just 0.5 percent annually, with the poorest families actually experiencing declines in real income.
The Rising Tide of In-Work Poverty
Perhaps most concerning is the dramatic increase in working poverty. The report finds that 55 percent of households living in poverty now contain at least one working person, a significant rise from just 38 percent in the mid-1990s. This statistic underscores how employment no longer guarantees financial security for millions of Britons.
Ruth Curtice, chief executive of the Resolution Foundation, provided sobering analysis: "The 13 million working-age families across the poorest half of the country are widely courted by politicians. But despite working harder they have seen their disposable incomes stagnate, as they grapple with shrinking pay rises, higher costs and a growing struggle with their health and care needs."
Curtice further warned that "The stalling of disposable incomes means that many families' hopes of home ownership have evaporated and work is not a guaranteed route out of poverty."
Policy Recommendations and Political Response
The research forms part of a comprehensive new publication titled Unsung Britain, which cautions that failing to address the "malaise" affecting lower-income families risks "further political disruption." Among key recommendations is reform of what the think tank describes as an "unfair" council tax system, noting that the poorest households now spend four times as much of their income on this tax compared to the wealthiest households.
Prime Minister Sir Keir Starmer has acknowledged the challenges, stating in January that "This Labour government is on your side, doing everything we can to ease the cost of living, and make life better." He added that "In 2026, the choices we made will mean more people begin to feel that positive change."
The report advocates placing living standards "at the heart" of government policy through targeted measures including energy bill discounts and reduced bus fares. However, the Labour government faces declining popularity in polls as economic pressures impact public opinion. Latest YouGov research shows 54 percent of Britons consider the economy among their most important issues, ranking above immigration at 50 percent and health at 32 percent.
Government Defends Economic Record
An HM Treasury spokesperson countered the report's findings, stating: "Living standards are higher than they were in the previous parliament and real wages are up more in the first year of this Government than the first decade under the previous government."
The spokesperson highlighted specific measures: "At the Budget, we took action to bear down on inflation and the cost of living - £150 off energy bills, a freeze to rail fares for the first time in 30 years, a freeze to prescription charges for the second year running, an increase to the national minimum and living wage and we lifted the two child benefit cap which will lift 450,000 children out of poverty by the end of this parliament."
Despite these government claims, the Resolution Foundation's comprehensive analysis paints a troubling picture of structural economic challenges that continue to undermine living standards for millions of British households, particularly those already struggling financially.
