The Living Standards Outlook 2023

2022 was a disaster for UK living standards. As inflation reached its highest level in 41 years, the Government responded with household cost of living support of £58 billion in 2022-23. Facing a tight labour market, employers raised nominal pay by its fastest rate since 1991. But real pay still shrunk, and government support was not enough to prevent median household incomes from falling by 3 per cent in 2022-23.

To deepen our understanding of where this crisis leaves Britain, our fifth Living Standards Outlook uses two approaches. First, a new survey of 10,000 adults in the UK explores how households are coping with the current crisis and what its lasting effects may be. Second, our modelling helps us to understand what the latest economic developments and planned government policy mean for household incomes and poverty this year and beyond.