Resolution Foundation: Families have suffered from £20,000 of lost living standards growth over the past 20 years
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The scale of Britain's living standards slowdown over the past 20
years is so large that a typical family today would be £20,000
richer had incomes continued at the rate of growth trending in
2005, when the Resolution Foundation was founded. During past 20
years, the Resolution Foundation has worked to put living standards
at the heart of political debates, through its forensic research
and hard-headed policy work. Its work across a range of issues,
including pay, tax,...Request free
trial
The scale of Britain's living standards slowdown over the past 20 years is so large that a typical family today would be £20,000 richer had incomes continued at the rate of growth trending in 2005, when the Resolution Foundation was founded. During past 20 years, the Resolution Foundation has worked to put living standards at the heart of political debates, through its forensic research and hard-headed policy work. Its work across a range of issues, including pay, tax, welfare, housing and public services, has allowed it to engage in the challenge of our time – how to lift living standards for low-to-middle income households. Policies that Resolution has designed and championed have put more money in people's pockets, including the introduction of the National Living Wage that has boosted the pay of a full-time worker on the wage floor by £83 a week. And yet, the living standards challenge facing Britain today is starker than ever. Since 2005, typical incomes for working-age families have grown by just 7 per cent – not per annum but over the entire 20 year period. This is a dramatic collapse from the 35 per cent growth recorded during the decade before (1995 to 2005). Had this continued, the typical family income today would be £51,000, rather than its actual level of £31,000. Some groups have fared better than others. Over this period, pensioner incomes have grown by 21 per cent and owner-occupiers by 14 per cent, while the incomes of working-age families in private rented accommodation have increased by just 4 per cent. Overall, the story of the last twenty years has been one of a remarkably broad-based collapse in living standards, which can only be addressed by getting at its root cause – a lack of productivity growth in the British economy. The Foundation has sought to address this by making the case via The Economy 2030 Inquiry for a new economic strategy to boost growth. This work culminated in late 2023 with the book Ending Stagnation, which was welcomed by then Chancellor Jeremy Hunt and Leader of the Opposition Keir Starmer. As it marks its 20th anniversary, the Foundation is looking to drive forward its mission of raising living standards across Britain through productivity-driven economic growth. It will also broaden its sights, to include low and middle income families, those on low pay and in precarious work, and those vulnerable to financial shocks. To assist the Foundation in its continued non-partisan research and policy work, it is today announcing the formation of a new advisory council, drawn widely from Britain's leading academics, economists, and political specialists to help guide it through its next phase. Members include Anna Valero (former Economic Adviser to Rachel Reeves), Baroness Shawcross-Wolfson (former head of the No. 10 Policy Unit under Rishi Sunak), and Sir John Kingman (Chairman of Legal & General). As well as deepening our understanding of how to drive living standards growth, and the policies that can support it, the Foundation is also ramping up support for start-ups directly involved in improving living standards in the world of work. Earlier this week Resolution Ventures, the social investment firm launched by the Foundation, announced the first close of its new WorkerTech Fund, with £6.75 million already secured from a range of social investors to back start-ups using tech to raise workers' pay, improving working conditions, and boost their careers prospects. Ruth Curtice, Chief Executive of the Resolution Foundation, said: “Over the past 20 years, the Foundation has helped to put living standards at the centre of political debate in Britain. And that's where they belong given the scale of the living standards slowdown across Britain, which has cost the typical family an astonishing £20,000 a year. “As we look ahead, the task of raising living standards across Britain is bigger than ever – we simply cannot afford any more stagnation. This makes the work of the Foundation even more urgent as we redouble efforts to push for sustained family income growth. Clive Cowdery, Founder of the Resolution Foundation, said: “I look back on the past 20 years since our formation with a mix of delight and fear. I'm delighted the Foundation has put low-to-middle income families front and centre of British political debate and has played a key role in virtually eradicating very low hourly pay. “But I feel continued fear that the problem we were established to resolve – the existence of a permanently precarious group of working people, forever denied the rising prosperity that others enjoyed – has got worse, not better. This makes our economy weaker, and our society and politics less stable. Resolving this lies at the heart of our renewed mission over the decades to come.” Notes to Editors Five landmark achievements for the Resolution Foundation:
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