Nearly half of Britons expect a further drop in living standards by the next general election

Almost half the British public expect to be worse off by the time of the next election in 2015 than they are now, reveals a major new polling project from the Resolution Foundation. In addition, much of the electorate is expecting the rest of this decade to be characterised by slow growth with more than one in three people thinking it will take four or five years for the economy to recover fully from recession, almost one in three thinking it will take between six and 10 years and almost one in six thinking either that it will take more than a decade or will never happen.

The poll, conducted as part of a wider study on “2015 – the living standards election” by YouGov for the Resolution Foundation, found that 46 per cent believe their living standards will fall over the next two years. Only one in five (19 per cent) think they will improve, while just over one in four (28 per cent) expect no change. The figures come a day before the release of official estimates of Britain’s GDP in the first quarter of 2013, which – if they show negative growth – would mean the country has entered a ‘triple dip’ recession.

In the new Resolution Foundation poll, Labour supporters, older voters and people on lower incomes are most pessimistic about their prospects.

Among Labour supporters, 58 per cent say they will be worse off in two years’ time, compared to 32 per cent of Conservatives and just 20 per cent of Liberal Democrat supporters. While 33 per cent of Lib Dems believe things will improve, this was matched by only 22 per cent of Conservatives and 17 per cent of Labour supporters.

People who voted in 2010 for one of the Coalition parties are gloomier about their prospects than those who say they support the parties today. Of those who voted Conservative in 2010, 43 per cent say they will be worse off by the time of the election, compared with 32 per cent of people who now say they will vote Conservative. Among Liberal Democrats, the corresponding figures are 37 per and 20 per cent.

Pessimism is also widespread among older Britons and less pronounced among the young. Six in 10 (61 per cent) of those aged 60 and over expect to be worse off in 2015, compared to one in four 18 to 24-year-olds (25 per cent), a little over one in three (36 per cent)  aged 25-39, and half of those aged between 40 and 59 (50 per cent).

People from lower-income households (with a gross annual income below £20,000) are also gloomier about their economic outlook – more than half (52 per cent) anticipate a fall in living standards – compared to fewer than one in three (31 per cent) in households where income tops £70,000. In households on incomes of £20,000 to £40,000, almost half (46 per cent) expect to be worse off, while this is true of four in 10 (41 per cent) of people in households where income is between £40,000 and £70,000.

The figures come as the first phase of a major new polling project commissioned by the Resolution Foundation to give an insight into what the British public think politicians can and cannot achieve on the economy and in relation to living standards at the election.

Potential voters are also very gloomy when asked to say how long it will be before Britain’s economy fully recovers from recession – an overwhelming majority think there is no prospect of this in the short term.  More than one in three (36 per cent), believe this will happen in four-to-five years but almost as many (29 per cent) think it will take longer still – between six and 10  years. Another one in ten (11 per cent) think full recovery will take longer than a decade, while 4 per cent believe it will never happen. Only a small proportion (7 per cent), believe the economy can fully recover in as little as two or three years.

As well as pessimism about the short-term future, the findings also show that a majority of the public – 53 per cent – feel their family’s living standards have declined since 2010. 14 per cent think things have improved while 30 per cent say their standard of living has remained about the same.

The poll’s downbeat findings reflect earlier research from the Resolution Foundation’s report Squeezed Britain 2013 which suggests it may be almost a decade before the living standards of low to middle income families fully recover to their pre-recession peak.

Gavin Kelly, chief executive of the Resolution Foundation, said:

‘There’s a gloomy mood among large parts of the electorate which suggests that, whether the GDP figures this week are slightly positive or slightly negative, people see the economy as stagnant. They think that the downturn that began back in 2008 still has some years to run – only a minority of the electorate sense a strong improvement around the corner. All of this reflects the enormous pressures on household incomes over recent years – from flat wages, rising prices and reduced support through tax credits.

‘If the question hanging over the polling booth at the next election is ‘are you better off than you were 5 years ago?’ then we know that for most people this is unlikely to be the case. But many people will be voting based on their future prospects rather than the recent past, and this poll shows us that as things stand many people are down-beat about how long it will take the economy to fully recover.  How this pessimism plays out in terms of party support will play a key role in determining the next election.’

The full polling project will examine what British adults think politicians can (and can’t) achieve on the economy and in relation to living standards at the 2015 general election. It will reveal whether people are resigned to falling living standards or believe they can be improved by policies that promote shared growth in the years ahead, what measures might be and how much power they think the government of the day has to bring these about.  It also considers the extent to which the electorate expects party leaders to demonstrate their credibility on the public finances and securing steady economic growth before they are considered convincing on living standards.

The full findings will be unveiled at an event at the Resolution Foundation on Monday (29 April).

Ends

Notes

All figures, unless otherwise stated, are from YouGov Plc.  Total sample size was 1,761 adults. Fieldwork was undertaken between 27 -28 February 2013.  The survey was carried out online. The figures have been weighted and are representative of all GB adults (aged 18+).

The Resolution Foundation is an independent policy and research organisation working to improve the lives of people on low to middle incomes.