It's the poor who suffer

 British households are only halfway through a two-year cost of living crisis, with average incomes likely to fall by more than £2,000, according to the Resolution Foundation, a leading thinktank has warned.

Typical disposable incomes for working-age family households are on track to fall by 3% in this financial year, and by 4% in the year to April 2024.

Only incomes of the very richest will rise, according to the thinktank’s annual Living Standards Outlook for 2023, while middle-income households will struggle to make ends meet after an average £2,100 loss.

The estimated 7% fall in living standards over two years is worse than the post-financial crisis squeeze, which resulted in a 5% slump between 2009-10 and 2011-12.

Lalitha Try, a researcher at the foundation, said low-income families were most likely to have their financial circumstances and health deteriorate.

Over the course of the two-year squeeze, real incomes among the poorest fifth of households will fall by 4%, compared with 9% for households in the top 5-10% (second-highest income bracket) of earners.

However, the richest 5% in society will be better off after sharp increases in interest rates that have already boosted returns on savings and investments.

“This means that they alone will see their typical incomes rise by 4% between 2021-22 and 2023-24,” the report said.

UK household income likely to fall by £2,000 a year, says thinktank | UK cost of living crisis | The Guardian