Income growth halved to just 0.7 per cent in the year leading up to last month’s general election, according to research by the Resolution Foundation think tank.
Although there was a “mini living standards boom” between 2013 and 2015, the organisation said this had come to “an abrupt halt” in the run-up to June’s vote.
It found that young families, aged between 25 and 34, were the one group whose incomes had not yet returned to the levels seen before the financial crisis.
Low- and middle-income families had the worst year in terms of living standards. Their incomes grew just 0.4 per cent, compared to one per cent for families in the top half of the income distribution.
Low and middle incomes have grown just three per cent since 2002/03, the report’s authors said, and considering housing costs these families are no better off today than they were 15 years ago.
“For millions of young and lower-income families the slowdown over the last year has come off the back of a tough decade for living standards, providing a bleak economic backdrop to the shock election result,” said Adam Corlett, senior economic analyst at the Resolution Foundation.
“Over the last 15 years and four prime ministers, Britain has failed to deliver decent living standards growth for young families and those on low incomes. Rising housing costs have added further financial pressures. The big surprise of the recent election and EU referendum wasn’t that many of those families turned out to vote against the incumbents, but rather why it’s taken so long.
“This is the big challenge facing Britain today. Not only do we need to get incomes growing again but we need to ensure that that growth is spread evenly across the country, across generations and between rich and poor.”
For more from the report, see the Resolution Foundation’s website.