Analysis and action on living standards
The Resolution Foundation is an independent think-tank dedicated to lifting living standards in the UK. We focus particularly on households with low and middle incomes; those on low pay or in precarious work; and those vulnerable to financial shocks. We also investigate fairness between the generations in our Intergenerational Centre.
For more information on our mission, history and recent expansion, please read the About us section of our website.
The prospects for people’s living standards are a function of two things: the outlook for overall economic growth and the outlook for how different households will share in the gains of that growth. In our annual Living Standards Outlook, we project levels and distributions of household income growth based on current economic and policy forecasts.
In this annual report, now in its 15th edition, we take a forensic look at both recent and longer-term trends in UK living standards. The overarching health of the UK labour market directly influences the share of people in low pay. Low Pay Britain explores trends in three of the most crucial factors when considering low pay: employment, wage growth and the minimum wage.
The UK’s housing market is not delivering for low-to-middle income families. In our quarterly Housing Outlook, we spotlight some of the key issues affecting housing in the UK today, from the impact of higher inflation on social renters’ housing costs, to what climate change means for England’s housing stock and for the families living in these homes.
Getting a job, and then getting on at work, is the essential means through which households can improve their circumstances. Our quarterly Labour Market Outlook lifts the lid on what’s happening beneath the bonnet of the UK labour market, and what’s in the pipeline for people’s pay and job prospects.
Real household disposable incomes (both before and after housing costs) are the core metric by which we assess people’s living standards. Virtually all of our work ultimately relates to incomes, but we also focus in on how incomes levels change, how the composition of incomes evolves and how best to measure these key trends.
How people spend their income, and how far that income stretches once adjusted for inflation, lie at the heart of the UK’s living standards. Our work focuses on different households’ consumption patterns and how price changes impact on their disposable incomes.
The distribution of income growth lies at the heart of our work, given our focus on low and middle income households. Our work focuses on changes in inequality, the distributional impact of policy changes, and living standards trends for those towards the bottom of the income distribution.
Getting a job, and then getting on at work, is the essential means through which households can improve their circumstances. Our research looks at how the changing labour market is affecting the nature of work, with a focus on the growth of self-employment and the rise in insecure forms of work. We look for solutions that enhance economic security without damaging the performance of the jobs market.
We look at the share of people in work, both individually and within households, how the nature of work is changing, why these trends matter for living standards, and what policy can do to influence or respond to big shifts in the labour market.
The Resolution Foundation calculates the real Living Wage – a voluntary hourly pay rate that is based on what families need to get by. We also publish research on the impact of the real Living Wage, as part of our wider work on low pay and the labour market.
In recent years important steps have been taken to ensure that employment rights in the UK are fit for the modern world. But these rights are only worth the paper they are written on if they can be enforced. Our labour market enforcement programme examines just how policy can best tackle non-compliance with labour market rules.
The UK’s housing market is not delivering for low-to-middle income families. Families are spending more of their income on housing and getting less for their money; fewer families are enjoying the security of home ownership or a social rented tenancy, with millions more living in the insecure private rented sector; and house prices have surged relative to incomes. Our work focuses on understanding the causes and impact of these developments, and on the appropriate policy responses.
The availability and quality of public services can make a significant impact on living standards, affecting our health, care, access to work and education, sense of community. Public services spending in Britain is broadly progressive, with the greatest ‘in-kind’ benefits going to low and middle income households.
We examine the distributional impact of public service spending in our research, and how public service provision can be improved to accomodate changing needs, all within the context made unavoidable by fiscal constraints.
Our work explores the choices being taken by the government with regard to public finances and how these choices may affect different parts of the population, particularly those on low incomes.
The UK’s major fiscal events – Budgets, Spring Statements and Spending Reviews – provide the Chancellor with an opportunity to shape Britain’s political economy through major policy announcements. Our work focuses on the policies under consideration in the run-up to fiscal events, and what policy decisions and the latest economic outlook (published by the Office for Budget Responsibility) mean for the state of Britain, and household living standards.
The design of the welfare system is of vital importance in providing support to families and ensuring that work pays. With the ongoing introduction of Universal Credit, perhaps the most far-reaching welfare reform in 70 years, the need to get the right interaction between benefits, taxation and support for services such as childcare is more pressing than ever. Our work examines the impact of the current benefits system on the living standards of UK families, and explores practical improvements that could be made in the future.
Individual’s health and disability can have a huge impact on their living standards, especially through their experience of the labour market. Our work looks at trends in ill health and disability across the population. We consider the specific barriers to work faced by those with living with disabilities and long-term health conditions, looking at income, working hours, job security and labour market options. We also examine how people with disabilities and health conditions interact with the social security system.
A growing economy comes with improving economic conditions: faster wage growth, increasing employment, and stronger public finances. All of these can help facilitate improvements in the economic position of families, particularly those on low-to-middle incomes. Our work in this area analyses the potential for future economic growth and how it can be shaped so that the benefits can be shared broadly across the economy.
Firms’ behaviour affects people’s job and career prospects, and well as their pay. Our work focus on how firms’ respond to policy changes and broader economic shifts, and what that means for employees’ living standards.
The UK has become a low investment nation. Both public and private investment in the economy has dropped off in the past few decades, with serious consequences for economic growth and living standards.
Our research focuses on the role of public investment and policy that can boost private investment and create shared growth. We also work on industrial strategy.
Taking on debt is one way in which households can support current living standards, and households’ debt levels determine their exposure to economic fluctuations and the costs they face in terms of debt servicing. Our work looks at the levels of different categories of debt across Britain’s households, the riskiness of this position, and how these have changed over time.
The pensions that people save into over the course of their working lives are a core part of living standards in retirement. Our work looks at changes in the level and security of retirement incomes, the distribution of pension savings and coverage, and trends in wider access to savings.
In recent decades household wealth in Great Britain has risen from around three times national income to almost seven times, driven by higher house prices and pension valuations. This rise has profound implications for society, since wealth and assets provide security for all who have it, and power for a few at the top. Recently there have been advances in measurement, but not so much in understanding the implications for society. Our work assesses what the distribution means for living standards today, how wealth taxation could be reformed, and how policy might promote wealth accumulation for all.
The UK’s journey towards a carbon neutral economy is set to move from setting ambitious targets to delivering progress that will bring profound changes in the coming decade that will affect people and places throughout the UK. Our work on net zero will focus on what these changes will mean for living standards, ensuring that the costs and benefits of the net zero transition are distributed across households, as well as preventing the costs of adapting and responding to a changing climate from falling unfairly across society
The UK’s exit from the EU has had a profound effect on the economy household living standards. Debate and discussion on our post-Brexit trade policy and on areas of closer alignment with the EU are ongoing. Our work focuses on how trade policy, including Brexit-related policy, affect people’s incomes.
How the government funds public spending – and by how much – are crucial questions for the economy and for inequality. With regular changes in the tax system, our work looks at the implications of new ideas. We also make our own proposals to make taxes both fairer and more reflective of the big trends in society.
The evidence shows that moving job is the most effective way to secure a big pay rise, as well as boost someone’s skills and meet their needs. The biggest pay rises of all are associated with moves between jobs and to different parts of the country, and mobility is especially important for young people at the start of their careers. Job mobility also brings broader economic benefits too – by better matching workers with their skills it enables firms to become more productive, in turn further boosting wages and growth.
New technologies are transforming the nature of work, reshaping our economy, and have the potential to turbo-charge productivity, and with it living standards. But the gains and losses of technological progress are often not evenly distributed among workers and firms.
The increasingly widespread use of automation, and now AI, in the workplace is already changing the nature of work for some. The scale of disruption that these technologies will unleash is still unknown, as are the ways in which they change our labour market.
How much income you have, how that income has grown, and how far that incomes stretches – particularly with regard to housing costs – depends to a large extent on where you live in Britain. Our work focuses on regional living standards trends, and the role of local and regional policy in shaping those shifts.
Intergenerational fairness has risen up the agenda in recent years. From job and housing insecurity experienced by young people, to a social care system not fit to support older generations, Britain faces living standards challenges that affect different generations in different ways. Responding effectively to these challenges means understanding what’s driving them, and how they can be addressed.
Demographic trends are central to today’s living standards challenges. The fact that people are living longer than ever before, leading to a higher proportion of retirees, has huge implications for resources, individuals, families and the state. Our work focuses on responding to demographic change – including the extra spending it will bring – so that people can enjoy improvements in living standards throughout their lives.
Migration has a big impact on the UK labour market, both in terms of the kinds of jobs migrants do, and the decisions taken by firms that employ migrant workers. Our work focuses on the impact of migration on the labour market, and what a post-Brexit migration policy might look like.
Macroeconomic policy – like the interest rates set by the Bank of England, or the level of spending and taxes set by the Government – affect the overall level of economic activity, and so have an impact on living standards across the board. Such policies play a crucial role in reducing the damage caused by recessions. And this is particularly important for those on low to middle incomes who are often particularly badly affected by a severe economic downturn. Our work seeks to contribute to a better-informed and more inclusive macroeconomic policy debate, and explores how monetary policy affects both broader economic growth and the incomes of individual households.
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