Britons poorer than they were in 2019 as living standards continue to fall
ONS data reveal that disposable income after tax is now £1 per month lower than in summer 2019 and more than £20 per month lower than in December 2019 once inflation is taken into account. On average, individuals have £38 less to spend monthly after tax than at the end of 2024, marking three consecutive quarters of declining living standards.
Despite inflation being 3.2% in November and Britain ranking as the fourth-fastest growing G7 economy behind the US, Japan, and Canada, living standards have declined. This decline is attributed to three major shocks in under two decades: the 2008 financial crash, Brexit, and the combined cost-of-living crisis and COVID-19 pandemic. People in their mid to late 30s have been especially impacted throughout their careers.
The government highlights that real wages have risen more in the past year than in the first decade of the previous administration. Recent budgets included support measures such as help with energy bills, prescription fees, fuel duty, and rail fares, alongside lower interest rates. The national living wage has increased by £900 annually for full-time low earners, and the national minimum wage by £1,500 annually.
Looking ahead, the Joseph Rowntree Foundation projects that living standards could fall by about £850 per year over the current parliament. They note that lifting the two-child benefit cap would help mitigate the impact on low-income households.
