Britons poorer than in 2019 as living standards continue to fall
ONS data show that inflation-adjusted disposable income is more than £20 per month lower than six years earlier in 2019. The average person has about £38 less to spend per month after tax than at the end of 2024, marking three consecutive quarters of falling living standards. Disposable income is around £1 per month lower than in summer 2019 and more than £20 per month lower than in December 2019. The 2019–2024 Parliament was the first in British history to oversee a fall in disposable income in real terms.
Since the 1950s, only a few periods have seen three-quarter declines in disposable income; the longest stretch occurred from December 2015 to March 2017. The government acknowledges the fall in living standards during the last Parliament but says actions are in place to improve conditions, noting a rise in real wages in the past year alongside measures on energy bills, prescription fees, fuel duty, and rail fares. Inflation was 3.2% in November, and there have been six interest-rate cuts since.
Budget measures include raising the national living wage by about £900 per year for full-time low earners and about £1,500 per year for those on the minimum wage. The Joseph Rowntree Foundation projects living standards to fall by around £850 per year over this Parliament, with policies such as lifting the two-child cap and freezing tax thresholds affecting the pace of decline and increasing the tax burden for many.
Sky News highlights that Britain’s "mini living standards bounce" in 2024 is over, with inflation rising once again. The UK is described as the fourth-fastest growing G7 economy behind the US, Japan, and Canada. The country has faced three major economic shocks in less than two decades: the 2008 financial crash, Brexit, and the cost-of-living crisis/COVID, contributing to career-long exposure to economic challenges for people now in their mid-to-late 30s.
