Living standards Politicians just don’t get the financial pressures faced by ordinary families 30 August 2012 More than two people in five (43%), think most politicians don’t understand the financial pressures they face, according to new polling from independent think tank, the Resolution Foundation, with levels of dissatisfaction running highest among the middle aged (53% of 45 – 54 year olds). The poll, a quarterly tracker of household finances, carried out by polling firm Ipsos MORI, finds that over a third of adults (36%) are feeling financially squeezed. And the squeeze may be expected to worsen: one in four (27%) are expecting their financial situation to get worse in the next year (compared to 27% in April and 23% in January) a quarter (25%) are planning to cut back spending next year (compared to 25% in April and 32% in January) only four in ten of those in work (42%) feel secure in their job (compared to 43% in April and 40% in January) The poll reveals that people on low to middle incomes who are in work are particularly struggling financially and feel especially let down by politicians. Half (49%) feel financially squeezed, and a similar proportion (50%) think politicians don’t understand their financial pressures. A third (33%) expect their financial situation to get worse, and a similar proportion (34%) plan to cut back spending in the next year. Previous Resolution Foundation work has emphasised that the squeeze currently being experienced by many households has been driven by wages not keeping up with rising prices. Prices increased twice as fast as wages between January 2009 and March 2012 (RF analysis of ONS data). But wage stagnation pre-dates the financial crisis – the average worker’s real pay increased by just 0.5% between 2003 and 2008. The Resolution Foundation survey comes on top of this week’s ONS finding that household actual income per head fell by 0.6 per cent in the first quarter of 2012 compared with the fourth quarter of 2011. It is now at its lowest level since the second quarter of 2005, primarily due to inflation outstripping the growth of household actual income over the intervening period. Gavin Kelly, Chief Executive of the Resolution Foundation said: “As long as living standards continue to decline, and until ideas for relieving financial pressures are on offer, the public will carry on feeling that politicians just don’t get it. As we move closer to the next election the electorate will want to see a shift from empathy to concrete policy proposals – which is going to be a real test for all the parties when money is so tight. “We are currently bumping along the bottom in terms of how families feel about their financial prospects for the year ahead and levels of job security – which is hardly surprising given that the spending power of households continues to fall.” Notes to editors Polling of 1,973 British adults carried out face to face by Ipsos MORI during 06 – 12 July 2012. Data are weighted to the national profile. Low to middle income households are defined as those with gross household incomes below the UK median – but excluding those with household incomes equivalent to the bottom 10% of working age households – and adjusted for household size. This equates to a gross household income of £12-30k for a couple with no children, £24-42k for a couple with two children and £30-48k for a couple with three children. Poorest households are defined as those below these income brackets, and higher earners above. Polling figures by household income exclude those who declined to state an income. Between January 2009 and March 2012 prices increased twice as fast as wages: seasonally adjusted average weekly earnings have increased by just 8% between January 2009 and March 2012 (ONS Labour Market Statistics July 2012 release); in the same period prices increased by 16% (RPI all items index, ONS ‘CPI And RPI Reference Tables, June 2012’). Wage stagnation pre-dates the financial crisis: Resolution Foundation analysis of Annual Survey of Hours and Earnings (ASHE) data shows that the median gross annual full-time wage (inflation adjusted) increased by just 0.5% between 2003 and 2008. The Resolution Foundation is an independent think tank working to improve the lives of people on low to middle incomes. This includes 11 million adults in 6 million households in the UK www.resolutionfoundation.org
