News
LOW EARNERS EXPOSED IN RECESSION AND RECOVERY
30 June 2009
The Resolution Foundation today launches a new programme of work to raise the profile of the UK’s 13.4 million ‘low earners’ and to address their plight in the recession and recovery.
Low earners are an invisible group of people living on less than average incomes but independent of state support. Low earners face significant challenges during the recession and recovery period. They are:
• squeezed in the mixed economy – often too poor to access the full benefits of private markets, yet receiving little state support
• an overlooked group – they include the working poor but also a large number of people above this who struggle to live month-by-month on their earned incomes
• vulnerable to loss of work and with few or no savings - low earners are highly exposed in the recession and at risk of paying the price when public spending is constrained.
Read more here
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Resolution Foundation calls for reform of social care to pass same tests as pensions
4 June 2009
Ahead of the publication of the Government’s Green Paper on adult social care, the Resolution Foundation is calling for future reform to pass the same five comprehensive tests that were applied to pensions.
The Foundation has been examining the pension reform process to draw lessons for social care. Pension reform is largely perceived as having been a successful process, with the Government now taking forward a far-reaching reform package which should put pensions onto a sustainable footing. Pension reform faced many of the same challenges now being faced by social care:
•The need for a political consensus in order for a lasting settlement to be achieved
•The balancing of responsibilities between Government, individuals and families
•Lack of public awareness
Read more here
Resolution Foundation welcomes minimum wage increase
12 May 2009
The Resolution Foundation welcomes the modest increase in the National Minimum Wage announced by the Government today, rejecting calls from some business groups to freeze it. The effect of such a small uplift on the UK pay bill is minor compared to the help it will give low earners across the UK to meet increases in the cost of living.
Low earners face higher personal levels of inflation than members of higher earning households because they spend a higher proportion of their monthly income on essential items such as food and fuel. The biggest downward pressure on prices in recent months has come from reductions in mortgage interest payments: low earners are less likely than higher earning households to have benefited from this trend because of their lower levels of homeownership.
The recently published low earners audit, Squeezed, showed the precarious position of low earners, just on the cliff edge of state benefits yet earning less than average incomes. Low earners are highly vulnerable to joining the ranks of the long-term unemployed. They are over-represented in positions susceptible to the effects of recession, such as retail and small and medium sized businesses, and often lack the skills and training to find new work easily. Without the National Minimum Wage set at a reasonable level low earners who lose their jobs could be discouraged from returning to the labour market at all.
Sue Regan said:
“The up rating of the national minimum wage recognises that while the cost of living has fallen for some people this is not true for the many low earners in receipt of the minimum wage who continue to live at the edge of their means.”
“Ageism is deep-seated but now is the time to tackle it” writes Matthew Taylor, Chief Executive, RSA
4 May 2009
The Resolution Foundation today publishes Matthew Taylor’s essay which builds on his keynote speech to the Foundation’s annual conference on Society and Ageing - is it time for a new paradigm? Matthew Taylor explores why we portray getting old as a terrifying disease, and suggests we can’t go back to a previous era of greater deference so we need to construct a new respect for age and its insights. This essay is the first in a series of essays illuminating the challenges facing the reform of social care.
Read the essay here
Listen to Matthew Taylor’s keynote speech here.
FOUNDATION WELCOMES NATIONAL ROLL OUT OF MONEY GUIDANCE SERVICE ANNOUNCED IN BUDGET
22 April 2009
Today the Government has announced that the national roll-out of the Money Guidance Service will begin in 2010, subject to early results from the pathfinders. The regional Money Guidance pathfinders were launched earlier this month in the North East and North West. This announcement would see free and impartial advice being extended across the country.
The Resolution Foundation, which has championed this cause on behalf of the UK’s 13.4 million low earners since 2005, is delighted to welcome this landmark announcement. Read more.
Read article in Progress Online
GOVERNMENT MUST ENSURE LOW EARNERS ARE NOT OVERLOOKED IN BUDGET AND BEYOND
21 April 2009
The Resolution Foundation calls on the Chancellor not to overlook the UK’s 13.4 million low earners (people who live on annual household incomes of between £12,000 and £27,000) in tomorrow’s budget. Read more
AUDIT SHINES SPOTLIGHT ON OVERLOOKED GROUP
The Resolution Foundation today publishes ‘Squeezed: the low earners audit’
30 March 2009
‘Low earners’ is the term the Foundation uses for the group of people who are ‘too rich’ to qualify for state support yet often ‘too poor’ to access the benefits of private markets. Low earners are ‘squeezed’ in the mixed economy and are a group whose needs, until now, have been overlooked.
The Low Earners Audit seeks to rectify this by putting low earners’ precarious position under the spotlight.
Read the full press release here.
Read the executive summary of the report here.
Read the full report here.
Research
The Foundation's research programme continues to work on long-term care but has also expanded to focus specifically on low earners in the recession. The Foundation has just published the first ever low earners audit, which will track the experience of low earners through the economic adjustment, with quartely updates. Read more here. |
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Comment
WELCOME RELIEF FOR LOW EARNERS IN CONSUMER WHITE PAPER
3 July 2009
The new Consumer White Paper brings together policy initiatives which will ease the pain of the recession for many low earners.
78% of low earners were in poor financial health prior to the recession and many have little or no safety net to weather difficult economic times. The Resolution Foundation is therefore delighted to see some future welcome relief for low earners:
1. New legislation to help private tenants against repossession – low earning homeowners can access help via the mortgage rescue scheme and mortgage interest support scheme but those in private renting have been left at the mercy of their landlord
2. Review of regulation around credit and store cards – many low earners spend a large amount of their limited monthly income on servicing unsecured debt
3. Further work to explore how high food prices, energy bills and water supplies can be alleviated for low incomes – inflation on food and utilities has risen quicker and left many low earners struggling to afford essential items
Sue Regan, Chief executive of the resolution Foundation, said:
“The Consumer White Paper is a positive development in easing some of the pain of the recession for low earners. However, low earners are highly exposed in the current economic context and their needs remain largely overlooked. The Resolution Foundation recently launched a new programme to ensure low earners are recognised and protected through the recession and recovery periods.”
Financial Health Forum
Latest Financial Health Forum meeting minutes published
May 2009
Download meeting notes here
Resolution Foundation and the Financial Health Forum; Helen Aynsley
Presentation
Pension Reform Communications; Susan McLaren
Presentation
Money Guidance: An Update; Sue Lewis
Presentation
Budget 2009
- The impact on low earners
Matthew Whittaker, Senior Economist at the Foundation says:
“The Budget had various measures to ease the precarious position low earners are in, however the path to financial balance set out by the Chancellor represents a serious near- and medium-term threat to the group.”
Read more on the budget’s impact on low earners here.
- Foundation welcomes Government use of financial capability clause
The Foundation was delighted to see the Government use the financial capability clause in the banks recapitalisation agreement to secure support for adult learning on financial health. Clive Cowdery wrote to the Chancellor calling for a social charter to be attached to the bank bail-out last October.
The Government said:
“Adults can also benefit from financial education, and the Government welcomes Lloyds Banking Group’s commitment to fund a £4 million programme to support financial capability through adult education, as part of the bank's recapitalisation agreement.”
Read Clive Cowdery’s letter here.
Events
30 June 2009 – Breakfast launch event: Low earners through recession and recovery
The Foundation launched a major new project examining the impact of the recession and recovery on low earners at this event. It follows the recent publication of Squeezed: the low earners audit which details the challenges being faced by low earners. At the event, we set out the key findings from the audit, described what our new project entails and discussed the key questions the projects seeks to address.
David Freud, Shadow Minister for Welfare Reform, was chair of the panel.
Presentations of the event are available to download
Resolution Foundation Annual Conference round-up
This year the Foundation’s Annual Conference stretched to a full day to accommodate an exciting line up of discussion and speakers.
The Conference was opened by the Foundation’s Chairman, Clive Cowdery, who presented the Foundation’s first ever low earners audit and explained why the Foundation focused on low earners in the two areas of social care for older people and financial health.
The next session on Care and an Ageing Society heard from Matthew Taylor, Chief Executive of the RSA, Stephen O’Brien MP, Norman Lamb MP and Barbara Keeley MP.
The afternoon session focused on the successful progress that Money Guidance is making with Otto Thoresen, Author of the Thoresen Review, and Sue Lewis, Head of Savings and Investments at HM Treasury.
The conference write-up is available here and Matthew Taylor’s key note speech Society and Ageing - is it time for a new paradigm? is available as a podcast here.
The following presentations from the day are also available:
Clive Cowdery’s presentation on the Squeezed: the low earners audit
Sue Regan’s presentation on the future of care and support for older people.
Helen Aynsley’s presentation on future Care Information and Advice Services.
Matthew Whittaker’s presentation on Housing Wealth
Claudia Wood’s presentation on the future of market shaping.
Sue Regan’s presentation on financial health and Money Guidance.
Sue Lewis’ presentation on HMT’s role in developing a national Money Guidance Service.
Navigating the Way Parliamentary Reception
8 December 2008
Read the write-up here.
Phil Hope addresses Resolution Foundation Parliamentary Reception, December 2008
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