New research into the cost of living shows average disposable
incomes for the bottom 40% will be £440 lower by 2029 than this
year with lowest-income households hit hardest.
- Latest research from October 2024 finds hardship is embedded
in the UK, with around 7m low-income households going without
essentials. This number has barely moved for three years.
- 5.4 million low-income households said they were unable to
afford enough food in the past 30 days.
- Looking forward, no households across the income distribution
see any rise in their disposable incomes once housing costs are
taken into account, but for the poorest 20% there is a
significant proportionate fall.
As the Prime Minister prepares to announce a new Plan for Change,
millions of families will struggle to feel any benefits of growth
as living standards are currently predicted to fall without
urgent action.
New analysis by JRF finds households in the bottom 40% of incomes
are on average around £300 worse off than they were before the
COVID-19 pandemic. They are forecast to be £750 worse off by
2029.
JRF is concerned this could see even more families going without
everyday essentials like food, heating or basic toiletries. Our
latest survey found seven million households in the bottom 40% of
incomes went without at least one essential in the past six
months.
70% of Labour voters in the 2024 election will consider not
voting for them again if progress isn't made on tackling the cost
of living.1
The lowest-income households are forecast to be hit hardest over
this parliament. The bottom fifth are set to see a real reduction
of around 7 percentage points in their disposable incomes, after
housing costs, compared to middle earners whose disposable
incomes will stabilise.
A key reason behind this fall is that housing costs are set to
continue to rise steeply, as incomes fail to keep up. By 2029,
housing costs for the bottom 40% of households will be on average
£470 higher per year than they were a decade before.
High housing costs outstripping what low-income households can
afford mean higher levels of hardship for these groups:
- 76% of low income renters and 71% of low income mortgage
holders reported going without essentials in the six months to
October 2024, more than twice the rate of low income households
who own their homes outright (37%).
- Just over half of low-income renters (52%) and 44% of low
income mortgage holders are in arrears with at least one
household bill or credit commitment in October 2024, around three
times the rate of low income households who own their homes
outright (16%).
Some families are more at risk of going without the essentials
than others:
- 85% of low-income families with three or more children
were going without essentials in the six months to October 2024,
compared to 52% of families with no children
- 62% of low-income families with three or more children
were in arrears on at least one household bill or lending
commitment in October 2024, compared to 27% of families with no
children, more than twice as many.
Commenting ahead of the Prime Minister's speech,
Rachelle Earwaker, JRF senior economistsaid:
"Improving living standards for the country is critical if the
Government is to meet their targets for economic growth. But
the dial won't shift if they ignore the seven million
low-income households still going without essentials, or the
housing costs that are set to drive a decline in living
standards over this parliament. Tackling the high cost of
living is what people expect as the top priority of this
Government and if no improvement is felt there will be a
political as well as a moral cost.
"If the Government fails to address current levels of hardship
and ensure that households have money left in their pockets
after paying their rent or mortgage, then more and more
families will face the indignity of not being able to pay their
bills or afford all the essentials, like warm clothes or hot
showers, because there simply isn't support available.
"The Government should take this chance to make sure that
improving living standards for low and middle income families
are at the heart of improving economic growth for the country.
To do this, they must take action to protect the households on
low incomes who are set to see the biggest declines in living
standards, and work to embed economic security for all."
Ends
Notes to Editors
At the Joseph Rowntree Foundation, we work to speed up and
support the transition to a future free from poverty, in which
people and planet can flourish.
Read our briefing, No end in
sight for living standards: JRF's cost of living tracker, winter
2024, here.
Between 8 and 31 October 2024, Savanta conducted online surveys
of 4,065 UK adults aged 18+ from households in the lowest 40% of
equivalised household income. Data was weighted to be
representative by age, gender, region, ethnicity and housing
tenure.
For more information on the methodology, see the full report.
- JRF, More in Common, "Voters' expectations of
Labour on tackling hardship.", October 2024
