The British risk experiencing the sharpest fall in their standard of living in several years since “at least the 1950s”. This is stated in a study by the Resolution Foundation think tank.
Lowest-income households “are likely to experience further declines in their income due to tax hikes, the end of cost-of-living support and rising housing costs,” the think tank said in a statement.
The interest rate hikes by the Bank of England to dampen inflation had no effect on households as they spiked monthly mortgage payments, the organization said.
While the worst of the longevity crisis may be over, with inflation falling and middle incomes “going to rise faster than prices”, this is not enough to turn the tide, the statement said.
Income down
“The current legislature is becoming by far the worst in terms of living standards since at least the 1950s.” The income of an average family in the 2024-2025 tax year “will be 4 percent lower” than five years earlier.
However, the interest rate hikes are not negative for everyone. On the contrary, families with savings, especially the elderly, will benefit from a “massive increase in savings”, according to the Resolution Foundation.
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