Belfast Telegraph

Household income in UK is down 0.5% in two years: report

Adam Corlett
Adam Corlett

By Vicky Shaw

UK households have been gripped by a tighter income squeeze in recent years than during the 1990s recession, according to a think tank.

Typical household incomes are estimated to have fallen by 0.5% over the past two years, between 2016-17 and 2018-19, the Resolution Foundation's annual Living Standards Audit said.

This is weaker than the 0.3% growth seen between 1991 and 1993, when the economy was in, and then recovering from, recession, according to the report.

The Resolution Foundation, whose work aims to improve living standards for people on low to middle incomes, said the next Prime Minister "faces an urgent task of restoring decent rises in household incomes after an extended period of weakness which, for some low-income families, pre-dated even the financial crisis".

The Foundation argued that while households have managed to boost their incomes by working more and curtailing their leisure time, they may be "running out of road" when it comes to improving their situation in this way.

Its report also found that despite male employment income representing the largest single element of working age household income, men and women have contributed roughly equally to income growth over the past 25 years.

Women's employment income has grown by £6,100 typically since 1995, while male employment income has grown by £7,100.

The Foundation said that just as the expansion of paid maternity leave and free childcare has supported family incomes over the past 25 years, a new set of policies will be needed, such as reforming Universal Credit to better support second earners in households to work.

Adam Corlett, senior economic analyst at the Resolution Foundation, said: "Over the past two years, UK households have experienced a near stagnation in living standards, even worse than the income-hit experienced during the early 1990s recession.

"Restoring decent levels of household growth is therefore one of the most critical challenges facing the incoming Prime Minister. The living standards history of the past 25 years tells us that there are two broad ways that families have traditionally got richer over time - higher pay off the back of rising productivity, and supporting more women into work.

"After an unprecedented income squeeze over the past decade, and a living standards outlook that includes child poverty rising to record levels, an economic approach that supports higher incomes for all households must be the top domestic priority for the incoming PM."

Belfast Telegraph

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