Questions and Answers

If you have any other questions or would like any further information not covered below, please click here to contact us.

What is the Resolution Foundation?

The Resolution Foundation is an independent research and policy organisation dedicated to improving the well-being of low earners in today’s mixed economy.

What are the Foundation’s aims?

We aim to improve the lives of low earners — those who are not benefit dependent but have below average (median) incomes and can be left struggling to make ends meet.

We want to bring about change in areas where this income group is currently disadvantaged by producing new research and economic analysis and actively engaging in the policy making process.

Who are low earners?

‘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. At its simplest, we consider the group to be made up of households in income deciles 3, 4 and 5: that is, with gross annual income between £11,650 and £27,150. Around 7.2 million households fall into this category in the UK, equivalent to around 14.0 million adults.

The Foundation published the Low Earners’ Audit in March which puts low earners’ precarious position under the spotlight — please see the low earners page for further information.

Why low earners?

This is one of the most overlooked groups in today’s society as they are not the poorest but are only the next step up on the income ladder.

In social policy terms, researchers, policy makers and the voluntary sector tend to focus on the poorest in society. Low earners also deserve attention as they tend to be in poor financial health, and are particularly vulnerable to falling out of work especially in the current economic environment. They also often fare poorly in private markets.

But surely the poorest are the most deserving?

You're right low earners are not the most vulnerable in society, nor does the Foundation argue that they are the most deserving. We do however, believe that they are squeezed by the workings of the mixed economy, exposed to unique pressures and frequently overlooked by public policy. This is what we are trying to achieve — greater focus on their particular position and needs.

What do you mean by the mixed economy?

The mixed economy is where the private, state and third sector all have a role in delivery and/or funding.

A mixed economy approach combines the benefits associated with well-functioning private markets with targeted state intervention. However, it inevitably results in a group which operates at the margin: too poor to benefit from the full range of opportunities provided by private markets but too rich to qualify for substantial state support. These are our low earners.

What is the Foundation’s approach?

We focus on a small number of projects, combining economic and social policy analysis to develop practical policy proposals. We take a non-partisan approach and we share our analysis with a range of stakeholders to influence decision making and encourage take up by policy makers.

We also continue to monitor and influence those issues we have previously worked on to see projects through to completion and ensure that reforms are successfully implemented.

What has the Foundation done on financial advice?

Our first research project explored low earners access to financial services and identified that there was an ‘advice gap’ for low earners. This work culminated in the announcement by the Treasury of the Thoresen Review which recommended a pathfinder for a new Money Guidance service. We were engaged with the development of the Money Guidance pathfinders, and are delighted that Money Made Clear was rolled out nationally in March 2010.

To support this work and to continue to engage in the wider issues of financial inclusion and financial capability we launched the Financial Health Forum in 2008. The Forum is an independent body of experts which aims to progress thinking and practice on issues relating to the population’s financial health.

What has the Foundation done on social care for older people?

We found that long-term care wasn’t working for older low earners, who often have over the threshold of assets in their house (£23,000) which can make them ineligible for subsidised care. However, they also have relatively low-incomes which makes paying for care a struggle. Many low earners therefore rely on informal care which might not always meet their needs or go without.

Over the last two years, the Foundation has conducted an extensive programme of research and policy work in the field of long-term care for older people, with a particular focus on the mixed markets in both funding and care provision. The Foundation has produced reports which map the long-term care market, and which suggest what a future architecture for a care and support system could look like. More recently, in 2010, the Foundation published a report which examines the use of equity release as a means for asset-rich, income-poor low earners to meet their care costs. The Resolution Foundation continues to work as part of the Care & Support Alliance to ensure social care reform is a priority for the new government.

What has the Foundation achieved?

Money Guidance — from obscurity to a national roll out from 2010.

The Financial Health Forum — the Forum’s chairman wrote to the Chancellor urging a social charter be attached to the bank bail-out agreements. A ‘financial capability clause’ was adopted and taken forward.

Comparison websites — the Foundation called for a voluntary code of practice for the comparison website industry. The Comparison Consortium has now been launched with an industry code of practice.

Long-term care:

The market for social care — the Social Care Green Paper and the Putting People First agenda both recognise that market development is key to improving how social care functions.

Information and Advice — the Social Care Green Paper empathises the role that information and advice plays in helping people get the right social care for them.

Housing wealth — the Social Care Green Paper examines how people could better use their housing wealth and suggests a universal deferred payment scheme.

The profile of low earners — whilst still often overlooked, low earners and the challenges they face are being more widely acknowledged in public debate.

How is the Foundation funded and governed?

The Foundation is privately funded via the Resolution Trust. It has a Board of Trustees, an Advisory Board and a Steering Group.