Britons poorer than in 2019 as living standards continue to fall
Disposable income after inflation is more than £20 per month lower than December 2019, with average after-tax spending £38 a month lower than at the end of 2024 due to three consecutive quarters of declining living standards. Disposable income is also £1 per month lower than summer 2019 after inflation. The 2019–2024 Parliament marks the first in British history to see a real-terms fall in disposable income.
Britain has experienced three major shocks in two decades: the 2008 financial crisis, Brexit, and the cost-of-living crisis combined with COVID, all contributing to weak living standards. The Joseph Rowntree Foundation projects that living standards could fall about £850 per year over this Parliament. It notes that lifting the two-child cap would ease the decline for low-income households, but frozen tax thresholds will raise real-terms taxes for many by the end of this Parliament.
The government states that measures such as energy-bill support, prescription and fuel duty relief, rail-fare relief, a higher national living wage, and the inflation rate at 3.2% in November are part of stabilising wages and prices. Despite these challenges, Britain remains the fourth-fastest-growing G7 economy, behind the US, Japan, and Canada.
