The Living Standards Outlook 2025

This is our seventh annual Living Standards Outlook. It looks at how incomes have fared over the decade so far and what may lie ahead given current economic forecasts and the Government’s tax and benefit policies, as well as alternative scenarios. Crucially, we are able to look at potential outcomes for different income groups, ages and housing tenures. 

While household income growth appears to have been strong in 2024, we have had a lost half-decade overall given the cost of living crisis. The Government has recognised this and has a goal of delivering higher incomes. Unfortunately, informed by the latest forecasts from the Office for Budget Responsibility and the Bank of England, projected growth up to 2029-30 is again weak – and outcomes are worst for lower-income households. The economic outlook would need to significantly improve to avoid the 2020s being a poor decade for income growth, although targeted policy changes could also directly improve the outlook for the poorest.