Britons are poorer than in 2019 as living standards continue to fall
Data from the Office for National Statistics (ONS) show that disposable income after tax is over £20 per month lower than six years ago in 2019, after adjusting for inflation. By the end of 2024, the average person has £38 less to spend each month after tax. Disposable income is £1 per month lower than the summer of 2019 and more than £20 per month lower than December 2019 once inflation is accounted for.
There have been three consecutive quarters of falling living standards, a rare pattern with only five other recorded instances since the 1950s. The longest run was five quarters between December 2015 and March 2017. The Resolution Foundation has noted that the 2024 mini bounce in living standards has ended and growth prospects for 2026 look weak amid three major shocks over two decades: the 2008 financial crash, Brexit, and the combined cost-of-living crisis with COVID-19.
The Joseph Rowntree Foundation projects living standards will fall by about £850 per year over the current Parliament. They state that lifting the two-child benefit cap would lessen the impact for low-income households. Additionally, freezing tax thresholds will lead many people, including low earners, to pay thousands more in real terms by the end of this Parliament compared to today.
A government spokesperson has responded, saying real wages increased more in the last year than in the first ten years of the previous government. Budget measures include energy bill relief, cuts to prescription fees, reductions in fuel duty, and lowered rail fares. Inflation fell to 3.2% in November. The national living wage has been increased by £900 per year for full-time low earners, and the national minimum wage has been raised by £1,500 per year.
Sky News reports that inflation has risen recently and that Britain is the fourth-fastest-growing G7 economy behind the United States, Japan, and Canada.
