The poorest fifth of the British population have suffered a 7% fall in their disposable household incomes over the past two years, leaving them no better off than they were in 2004-05.
This fall compared with an increase in median disposable household incomes of 0.4% a year over the last two years to £29,600.
Income growth had “stalled” as a consequence of an improved labour market – such as a higher employment rate – being “moderated” by an ongoing freeze on certain working-age benefits.
Pay for the highest paid 0.1% of the population rose nearly 6% between April and September last year, compared with 3.7% for the rest of the workforce.
Adam Corlett, a senior economist at the Resolution Foundation thinktank, said employment growth for poorer households had failed to protect the incomes of the lowest paid, “reflecting the scale of the benefit freeze and other social security cuts – the impact of which is concentrated on the poorest households”. He said the figures dispel claims from some commentators and politicians that income inequality is at its lowest level in 30 years.
This fall compared with an increase in median disposable household incomes of 0.4% a year over the last two years to £29,600.
Income growth had “stalled” as a consequence of an improved labour market – such as a higher employment rate – being “moderated” by an ongoing freeze on certain working-age benefits.
Pay for the highest paid 0.1% of the population rose nearly 6% between April and September last year, compared with 3.7% for the rest of the workforce.
Adam Corlett, a senior economist at the Resolution Foundation thinktank, said employment growth for poorer households had failed to protect the incomes of the lowest paid, “reflecting the scale of the benefit freeze and other social security cuts – the impact of which is concentrated on the poorest households”. He said the figures dispel claims from some commentators and politicians that income inequality is at its lowest level in 30 years.
“The data lays bare the incredibly weak living standards growth the UK has experienced in recent years, contributing to a lost decade of income growth. The income squeeze, which abated in the mid-2010s, has returned in recent years. The new stagnation has affected households of all kinds, but the recent squeeze has been much worse for poorer households who have seen big living standards falls. Crucially, this has been driven by policy choices, with gains from higher employment more than wiped out by benefit cuts. The result is that poorer households are no better off than they were in the mid-2000s.”
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