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Lower income households 'struggling to pay for accommodation'

Published 26/12/2015

Almost a third of the lowest income households have debts of four times their gross income, the Resolution Foundation said
Almost a third of the lowest income households have debts of four times their gross income, the Resolution Foundation said

More than one in four of the poorest households has had difficulty paying for their accommodation in the last year, compared with just 7% of those in the top fifth by income, according to a new report.

The Resolution Foundation said almost a third of the lowest income households have debts of four times their gross income.

An increase in inequality appears "inevitable", even with the introduction of the £7.20 an hour national living wage from April, predicted the think-tank's chief economist Matt Whittaker.

"Though incomes are finally headed in the right direction, the concentration of debt exposure among lower income households does provide another reminder of need to focus on the distribution of gains from the economic recovery," he said.

People on lower incomes are more likely to be spending over a third of their gross income on mortgage repayments, he added.

"Unsurprisingly, housing-based financial distress is felt most acutely by those with the lowest incomes."

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