Blog & Articles

Taking a local look: Household disposable income

Date: 24. April 2013
Giselle Cory

Today’s figures from the ONS show that household disposable income continued to fall in 2011. This is part of a longer term trend of stagnation and decline in incomes that began around 2003. As we showed in the Commission on Living Standards, disposable income per head fell in every English region outside London from 2003 to 2008, even while the economy continued to grow. For much of the UK, the squeeze started long before 2008.

Today’s new data show this trend is worsening. Disposable incomes across the UK fell in 2011 much more than in the previous year. Across the UK, the average fall from 2010 to 2011 was 2.4 per cent, compared to a fall of 1.2 per cent in 2010 and growth of 3.1 per cent in 2009.

But again it is the regional breakdown of income growth that is most striking. The chart below shows the change in disposable income per head from 2003 to 2011 in English regions, Scotland, Wales and Northern Ireland.

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Squeezed Pig Small

Squeezed middle: all pain, no gain

Date: 30. January 2012
Matthew Whittaker and

This article originally appeared in Public Finance Magazine

Average incomes in the ‘squeezed middle’ group will take until at least 2020 to return to their 2007 level – a trend made even worse by public sector cuts  

With two out of three British workers facing pay freezes, inflation running at an annual average of 5.2% and widespread cuts to government spending on services and benefits, it is no wonder that the Oxford English Dictionary declared ‘squeezed middle’ to be its Word of the Year in 2011.

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Family Budget

Waving goodbye to two decades

Date: 25. January 2012
Gavin Kelly and

This post originally appeared on Gavin's New Statesman blog

Another week, another terrible set of GDP figures, an IMF downgrade of the UK's growth prospects, and a new report showing the squeeze on living standards is set to run and run. The public, along with our politicians, is probably starting to grow immune to some of the shocking headlines about how long it will be before their incomes recover. All attempts at peering into our economic future do, of course, need to be taken with a handful of salt. And if long range economic forecasting is a mug's game, then seeking false precision about the resulting political consequences is truly the pursuit of fools.

Yet for all the uncertainty we can discern the broad contours of different possible paths for living standards over the rest of the decade. None are attractive -- though some are uglier than others. All are likely to challenge the standard assumptions upon which recent politics have been based.

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terraced housing

Homeownership: the preserve of the rich?

Date: 25. January 2012
Joe Coward and

This post originally appeared on Mortgage Solutions

One of the most striking findings of our Squeezed Britain report, which sets out the economic position of the squeezed middle in forensic detail, is that home ownership is now out of reach for many people on low to middle incomes (LMI).

On the basis of current incomes, house prices and the loan-to-value ratios now available, it would take a first-time buyer on a low to middle income 22 years to save for a deposit compared to three to five years in the 1980s and 1990s.

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Squeezed Pig

The real squeezed middle could stagnate for 20 years

Date: 24. January 2012
Joe Coward and

This post originally appeared on Left Foot Forward

This morning Liam Byrne and David Laws launched a new Resolution Foundation report, Squeezed Britain, which sets out the economic position of the squeezed middle in forensic detail, offering some pointers towards what will be the key political issues over the next few years.

The report focuses on people on low to middle incomes, who the Resolution Foundation define as working-age households who are living largely independent of the state but with incomes below the median (middle).

This group of 10.1 million adults and 5.8 million households comprises approximately one third of the working age population, living on an average household income of £20,500 after tax.

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