General Election 2024
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Living standards

Hard times

Assessing household incomes since 2010

Adam Corlett
Adam Corlett
Lalitha Try
Lalitha Try

This briefing note is part of the Resolution Foundation’s ‘Need to Know Election 2024’ series and examines how income growth, poverty and inequality have changed over the last Parliament and since 2010.

At the General Election, living standards growth should be on the agenda for any party wishing to form the next government. This is because income growth since 2009-10 has been particularly low, with typical non-pensioner household incomes growing by just £1,900, or £140 per year. Our income growth has also been weak by international standards: had we experienced the same level of growth in median incomes between 2007 and 2022 as the Netherlands, France and Germany, the UK’s median income in 2022-23 would be £2,700 higher than actually observed. The income growth we have had over this period has been progressive, but less progress has been made on bringing down poverty rates than in previous time periods.  

These findings reinforce previous Resolution Foundation research on the UK’s stagnating economy and high inequality. Whichever party forms the next government must be willing to take steps to boost living standards, so all families in the UK can experience shared growth. 

Key findings

  • Real household disposable income (RHDI) was 0.6  per cent lower in Q1 2024 (the latest data at the time of the last General Election) than it was in Q4 2019. Although there is still more data to be released before we can conclusively assess progress up to the 2024 election, it is likely that the 2019-2024 Parliament will have been the worst for income growth since at least the 1950s.  
  • Taking a longer view, typical non-pensioner incomes have grown since 2009-10, by £1,900, or 7 per cent. But again, this level of income growth – equivalent to an average annual real-terms change of 0.5 per cent, or £140 a year – is unusually low by historical standards. And had we experienced the same level of growth in median incomes between 2007 and 2022 as the Netherlands, France and Germany, the UK’s median income in 2022-23 would be £2,700 higher than actually observed. 
  • It is changes in the labour market since 2010 that have really driven the income growth for low-income households. Employment gains have been concentrated at the bottom of the income distribution, pay inequality has fallen, and the incidence of low pay considerably reduced since the introduction of the NLW (National Living Wage). 
  • Over the last 14 years, absolute poverty (where the poverty line is fixed at 60 per cent of the 2010 median income in real terms) has fallen for all age groups, by 3.9 percentage points (230,000 people) for children, 3.9 percentage points (730,000) for working-age adults, and by 2.8 percentage points (280,000) for pensioners. But this is very slow progress by historical standards.  
  • The picture concerning relative poverty is more mixed: working-age relative poverty has fallen since 2009-10, but this has been partially offset by slightly higher relative poverty rates for children and pensioners. This increase in child poverty has been driven by the rapidly rising number of children in large families living in poverty: since 2009-10, the number of children in poverty in families with three or more children has risen by 840,000.  

Further reading

Unsung Britain
The changing economic circumstances of the poorer half of Britain
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Mike Brewer, Molly Broome, Nye Cominetti, Adam Corlett, Charlie McCurdy, Louise Murphy, Cara Pacitti, Hannah Slaughter, James Smith, Lalitha Try
Great expectations in hard times?
Previewing the big decisions for the Chancellor in the new Government’s first Budget
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Emily Fry, Cara Pacitti, James Smith
Cold comfort
Mitigating the Winter Fuel Payment cut
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Alex Clegg, Jonathan Marshall
Adam Corlett
Adam Corlett Principal Economist
Lalitha Try
Lalitha Try Economist