Overview of the Situation
According to a report by a group of experts, the living standards of Britons are expected to barely grow over the remainder of the decade. Moreover, lower-income households are likely to experience a decline, partly due to restrictions on social benefits. The Resolution Foundation’s findings indicate that median family income after tax, benefits (including pensions), and housing expenses will only increase 1% more than inflation by the 2029/30 fiscal year.
Income Trends Across Different Groups
- Low-income families: These households are projected to see a 1% decrease in income.
- Mortgage-paying households: Their incomes are expected to fall by 1% as higher interest rates affect more borrowers.
- Typical homeowners: Their incomes are forecasted to rise by 3%.
- Pensioners: They will experience a 5% increase in income.
- Families with children: Their incomes will not increase.
Potential for Positive Change
Adam Corlett, the principal economist at the think tank, noted that the forecasts might be overly pessimistic if the economy grows faster than anticipated. He also pointed out that lower-income households could benefit if the government abolished the two-child limit on certain family benefits, which was introduced by the previous Conservative government.
Government Policies
Despite calls to remove the two-child limit on family benefits, the government has stated it will not reverse plans to make it more difficult for individuals to claim long-term sickness and disability benefits.
Key Questions and Answers
- What does the report predict about UK living standards? The report forecasts that UK living standards will barely grow over the decade, with lower-income households likely to experience a decline.
- Which income groups will see an increase? Pensioners are expected to see a 5% income rise, while typical homeowners will experience a 3% increase.
- Which groups will face income decreases? Low-income families and mortgage-paying households are projected to see a 1% income decrease.
- What could improve the situation for lower-income households? The government abolishing the two-child limit on family benefits could benefit lower-income households.
- What are the government’s plans regarding benefit claims? The government intends to make it more challenging for individuals to claim long-term sickness and disability benefits, despite calls to remove the two-child limit on family benefits.
