Analysis and action on living standards
Last week saw the Chancellor reveal the results of the first ‘zero-based’ review since 2008, the first stand-alone Spending Review since 2019, and the first three-year plan since 2021. This briefing note sets out the decisions and discusses what they mean for people, public services and policy for the rest of the Parliament.
At the upcoming Spending Review, the Government has a chance to deliver a long-term settlement for the Household Support Fund, the largest form of discretionary crisis support in England. Conceived of as a temporary post-Covid initiative, the HSF has already been renewed six times and will have provided an estimated 80 million awards by the time its current funding runs out in March 2026, at a total value of £3.7 billion.
The Resolution Foundation is an independent think-tank focused on improving living standards for those on low-to-middle incomes. We work across a wide range of economic and social policy areas, combining our core purpose with a commitment to analytical rigour.
In March, the Government released its Pathways to Work Green Paper, setting out a package of welfare reforms that amounted to a net reduction in spending of £4.8 billion in 2029-30. On the Government’s own figures, 3.2 million families will lose out, 250,000 people will fall into poverty, and 700,000 families will fall further below the poverty line. These benefit cuts were accompanied by a significant increase in employment support costing a cumulative £1.9 billion between 2026-27 and 2029-30 but with over half of that not coming until the final year.
Abolishing the two-child limit would be the most cost-effective way to reduce child poverty; if it is not scrapped, we project that 4.8 million children (34 per cent) will be in poverty by 2029-30, including half of all children in large families. There has been speculation in recent weeks that the Government is considering measures that would reduce the impact of the two-child limit, but fall short of fully scrapping it.
The Resolution Foundation calculates the real Living Wage – a voluntary hourly pay rate that is based on what families need to get by. The current national rate is:
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Evaluating the economic importance of intergenerational exchanges including housing assistance, childcare and other unpaid care, and financial aid.
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