Analysis and action on living standards
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. These twin pillars of rigour and purpose underpin everything we do and make us the leading UK authority on securing widely-shared economic growth.
The Foundation’s established work programme focuses on incomes, inequality and poverty; jobs, skills and pay; housing; wealth and assets; tax and welfare; public spending and the shape of the state, and economic growth.
For more information on our mission, history and recent expansion please read the About Us section of our website
In this annual report, running since 2009, we take a forensic look at both recent and longer-term trends in UK living standards. Living standards are affected by a wide range of factors, and it is only by learning the lessons of what drove improvements in the past that we can hope to restart growth and so fix the future.
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.
Our quarterly Earnings Outlook analyses data on the forces behind current developments in pay, how the fruits are shared, and the short- and longer-term drivers of earnings growth. Along with our publication, you can explore trends in our interactive data dashboard.
The overarching health of the UK labour market directly influences the share of people in low pay. In Low Pay Britain, we explore trends in three of the most crucial factors when considering low pay: employment, wage growth and the minimum wage.
We crunch the numbers for every budget and major fiscal event to project impacts on living standards.
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 amount the government brings in and spends matters for both the size of the state and the spending envelope within which policy can be made. Our work considers trends in public spending, and what these mean for the size and shape of the state.
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.
The jobs people have make a huge difference to household incomes and living standards. Our work focuses on 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 quality and security of people’s work makes a huge difference to their living standards. Precarious work, for example, often carries a pay penalty. Our work focuses on trends in job security – such as the rise of the gig economy – and how policy can respond to these big labour market shifts.
Rising skills levels and educational attainment are an important driver of rising pay for individuals, and rising productivity for the economy as a whole. Our work focuses on how best to boost skills, how skills are distributed across the workforce, and the extent to which rising skills levels translate into higher living standards.
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.
Material living standards are the result of labour market outcomes, taxes, benefits, housing and more. Bringing all of these together, we track past, present and projected changes in incomes to assess how the economy is really working for households. We look especially at low-to-middle-income families, and at the various inequalities in modern Britain.
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.
Secure routes out of poverty, the ability to accumulate wealth and paths into higher pay are all important for boosting people’s living standards and position in society over the course of their lifetimes or in comparison to their parents. We look at trends in social mobility on a range of different measures, and what drives these.
There is more to life than GDP. When discussing living standards, we are increasingly looking at subjective well-being to complement data on income and output. Our work looks at changes in well-being across different groups, and what drives these changes.
How people spend their time is an important component of how they view their living standards, with the aim that growing productivity ultimately delivers more time for leisure and other non-work activities. Our work explores how people’s working time – and their time outside of paid work – is evolving, and how this varies across different groups in society.
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.
As the main long-term, sustainable driver of higher pay, stronger productivity growth lies at the heart of our focus on boosting household incomes. In policy terms, that productivity drive is often delivered through an industrial strategy. We focus on how to deliver an effective industrial strategy, and stronger productivity growth that feeds through into pay packets.
The UK’s exit from the EU will have a profound effect on household living standards, though what that effect will be will depend on the nature and timing of Brexit. Our work focuses on how Brexit, and Brexit-related policy areas such as our trade policy, affect people’s incomes.
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.
The Scottish government’s legislative powers give it an opportunity to shape a distinct living standards agenda from the rest of the UK. Our work focuses on living standards trends across Scotland, and how policy can drive different outcomes.
From the rise of the robots, to the ubiquity of smartphones and social media, technological changes have a profound impact on our living standards today, and our prospects for the future. Our work focus on the impact that technological change can have on people’s disposable incomes.
While the Foundation focuses on UK living standards, our work also draws on cross-country income trends, and policy solutions that have worked – or come unstuck – in other countries.
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 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.
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.
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.
Universal Credit is the biggest welfare reform in a generation, rolling six key benefits into one monthly payment. The design, generosity and implementation of Universal Credit have huge living standards implications for millions of low and middle income households. Our work assesses Universal Credit in terms of its impact on incomes, work incentives and its fit with the lives of claimants and the changing nature of the labour market.
Childcare can be a key component of a family’s outgoings, and the cost and availability of childcare can also have a huge impact on the hours people work, or whether they work at all. Our work focuses on the design and funding of formal childcare, and what this means for household’s work choices and disposable incomes.
Social care plays a vital role in society, but it is under-funded in terms of care provision, and one of the lowest-paid sectors in the economy. Our work focuses on delivering a sustainable long-term future for social care, including better pay and conditions for care staff.
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. The Intergenerational Centre has been set up as a home for this analysis and policy thinking, looking at living standards through a generational lens.
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.
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.
Policy decisions taken by the Bank of England – including setting interest rates and inflation targeting – have a huge impact on both the macroeconomy and the microecoomy. Our work focus on how monetary policy affects both broader economic growth and the incomes of individual households.
The government’s tax and spending decisions affect the direction of our economy, in good times and bad, and have a huge impact on households. Our work focuses on the impact of fiscal policy on economic growth and debt, and on households across the income distribution.
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.
Britain’s post-crisis stagnant pay growth presents a serious challenge to living standards. Our work on pay seeks to understand the drivers of this unprecedented squeeze. Underneath this big question we have several areas of focus. One is the problem of low pay, including workers that are ‘stuck’ and what can help them move better paid work. Another is the the minimum wage, which has had a tremendous impact on the labour market in its 20 years, even more so since its increases post-2016, but which now faces an uncertain future. Finally, in addition to our research, every year we calculate the real Living Wage rates for London and the Rest of the UK on behalf of the Living Wage Commission.
Our quarterly Earnings 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. Each edition includes a Spotlight article that focuses on an emerging labour market trend.
For much of the last two decades, around one-in-five workers across Britain have been low paid – earning below two-thirds of the median hourly wage. Our work looks at changes in Britain’s low pay landscape, and the factors and levers that help people escape low pay, or get stuck in it.
The UK’s National Minimum Wage was introduced in 1999, and has increased in terms of its generosity and coverage ever since. The introduction of the National Living Wage – a higher legal wage floor for workers aged 25 and over – in April 2016, has rapidly increased our legal wage floor. Our work focuses on the impact of the minimum wage, and how it should evolve in the future.
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 low pay and the labour market.
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