Megafunds, misogynistic dating apps and mad picks across the pond

Afternoon all,

This week saw a bittersweet moment at RF Towers. We launched our exciting ‘Unsung Britain’ project, hosted by Executive Chair Gavin Kelly for the final time as he’s bowing out after nearly 15 years at the Foundation (he’s off to run the Nuffield Foundation – great hire! unlike below…). Catch up on the event, and read the report here, if you’d like to find out more about the 13 million low-to-middle income households who make up ‘Unsung Britain’.

More mad international news this week. X continued x-piring (so join me on BlueSky) and Trump picked a Fox News personality who threw an axe at someone on live television for his Defence Secretary.

Back home, the Chancellor’s Mansion House speech last night was a biggie – thoughts on the eminently sensible reforms proposed below.

Have a great weekend,

Mike
Interim Chief Executive
Resolution Foundation

Welfare and wellbeing. New analysis from your author (among several) looked at the impact of Universal Credit (UC) on wellbeing by comparing how newly-unemployed people claiming UC fared compared to similar people claiming the old fashioned benefits. UC does have a simpler benefit application system, resulting in a lower administrative burden that has a positive influence on mental health. But this couldn’t mitigate the negative impact of lower incomes and more difficulties paying bills, particularly for single adults and lone parents. The glacial speed of academic publishing means that the study used data from 2013 to 2018, when UC was being gradually introduced across the country. Back in today’s world, DWP finally announced that all people receiving the un-reformed ‘legacy’ benefits will be moved to UC by the end of March 2026, meaning we will finally be living in the brave new world set out by IDS back in 2010.

Lodging in London. The latest report on London’s housing stock is out. HighLowlights include: we’re not building densely, more than one-in-four private renters are struggling to pay their bills, and only 38 per cent of homes are affordable ¯\_(ツ)_/¯. And with the capital seeing a record high population of 8.9 million people last year, these issues of housing scarcity and affordability are likely to only become more acute. So, definitely room for improvement – hopefully this data can serve as a useful baseline to inform implementation of the Mayor’s London Housing Strategy.

Falling fertility. The baby bust is a hot topic recently, with the ONS revealing that Brits are currently birthing fewer bairns than when half the blokes were in the trenches. And it’s not just us: fertility rates are nose-diving around the world, with serious long-term consequences for labour markets, economic growth, and public finances. Luckily, Alice Evans has got a brilliant run down of why this is happening globally. She argues that any convincing theory must be able to explain both “the global collapse and local variation” in fertility rates – simply chalking it up to the UK’s eye-watering property prices paints an incomplete picture. While easy answers prove elusive, higher levels of education and economic autonomy among women who are choosing to duck the motherhood penalty, avoid the burden of intensive parenting expectations and tap out from an increasingly misogynistic dating market could all play a part. Evans also points out that the decline in fertility ties into a decrease in coupledom and the explosion in personalised online entertainment – maybe people are simply choosing Breaking Bad over Making Babies?

Give generously. The Bank of Mum and Dad is increasingly becoming a pre-condition for home-ownership in Britain, and it’s growing across the pond as well. In a wonderful warm-up for our own analysis of the trend,  this report examines the impact of parental gifts (cold hard cash and rent-free accommodation) and how they can contribute to entrenched inequalities across generations. Using data on nearly 40,000 parent-child pairings between 1992 and 2018, the authors show that, as inequality increases, so poorer parents become less likely to offer financial support, while better off parents become more likely. But if they can’t offer financial support, instead they offer in-kind help: children of poorer parents are more likely to continue living at home at times of higher inequality – either an uplifting story of familial support or a gloomy glimpse into the state of social mobility, depending which way you spin it. The research offers a sobering reminder that it is often those who have the least who do not receive the help they need.

Mulling mansions. Last night was the annual shindig at Mansion House. Bank Governor Andrew Bailey took a swing at explaining why growth is important (others explanations are available), while the Chancellor set out new policies to deliver it, including….pension megafunds. Wait! Before your mouse drifts over to the unsubscribe button, this does actually matter! Pension funds used to be big investors in the UK real economy, but have since departed the scene, contributing to the UK’s chronic underinvestment and weak growth. Bigger, consolidated ‘megafunds’ should find it easier to actually invest in real stuff (like infrastructure), and do more to discipline company owners. And what of the orange elephant in the room? Both Ms Reeves and the Governor made supportive noises on free trade. The hope here is that UK can keep a low profile and stay out of a US-China trade war while ‘resetting’ the EU. Good luck, as they say, with that…

Chart of the week

Unsung Britain is a massive deal for us – the Foundation was set up to support low-to-middle income families after all – and it should matter to politics too – their prospects lie at the heart of any government’s mandate. Lower-income Britain has changed a lot over the past three decades – they are more diverse, more likely to rent rather own their own homes, and are older and sicker, but more likely to work. COTW explains this apparent paradox. The share of people who are economically inactive (yes, terrible term) due to ill-heath has been relatively stable since the mid-1990s, although it has risen for women, who are now just as likely as men to be out of work for this reason. But the share of women in particular who are inactive in order to look after family or home and have dependent children has plummeted – from 21 per cent in 1996-97 to just 9 per cent in 2021-22. So, the nature of inactivity has changed over time. But what does this mean for overall levels of economic inactivity today? You’d like to know, we’d like to know, and the Government definitely needs to know as they prepare their Get Britain Working White Paper. Unfortunately, the main data source for this – the Labour Force Survey – has deteriorated in recent years and we basically don’t believe it anymore. We’ll explain why – and why it needs fixing – in research out on Tuesday.