‘Low-income families face three years of stagnating living standards’ – report

“JUST about managing” families on the lower end of the pay spectrum are set for three years of stagnating living standards, a new report has warned.

The Resolution Foundation think tank said average incomes are set to rise over the years before the next general election in 2022, following real-terms falls which made 2017/18 the third-worst year for incomes in 25 years.

But eight million working households on low and middle incomes still face flat or falling living standards between 2017/18 and 2019/20, suggesting Britain may be facing its first sustained rise in inequality since the late 1980s.

The report blames the rollout of £14bn in welfare cuts, which will more than offset rises in the minimum wage and predicted pay increases for families receiving in-work benefits.

The people described by Prime Minister Theresa May as “just about managing” look set for a rise in incomes of just 2% – the equivalent of £300 – over the decade to 2020, compared to 10% (£3,100) for higherincome working-age households, said the Foundation.

On some measures, levels of income inequality are projected to reach record highs by the early 2020s, having fallen in the immediate aftermath of the financial crisis.

Resolution Foundation director Torsten Bell said: “This parliament risks seeing the first sustained rise in income inequality since the 1980s.

“But the story this time around is less about the rich soaring further away, and more about poorer families falling further behind as they bear the brunt of £14bn of welfare cuts,” Mr Bell said.