Recent research from the Joseph Rowntree Foundation (JRF) highlights a troubling outlook for the living standards of the UK’s poorest families, predicting a stark decline in financial wellbeing as we approach 2030. The charity’s findings indicate that the living standards for the lowest third of earners are poised to drop at twice the rate of those in middle and higher income brackets, jeopardising the financial fabric of countless homes across the nation. Yet chancellor Rachel Reeves claimed on the BBC that she disagreed with the JRF – conveniently, of course.
JRF: UK living standard set to fall by 2023. Reeves? Nah.
The JRF’s report concluded that average households are expected to see their disposable incomes decrease by £1,400 over the next five years. This, combined with rising living costs, threatens an overall fall of 3% in disposable income.
For the most vulnerable households, the situation is even worse; they are projected to be £900 worse off annually, translating to a staggering 6% reduction in disposable income. Such predictions serve as a grim reminder of the uphill battle many face in maintaining basic living standards amidst growing economic pressures.
The analysis further predicts that average earnings could plummet by £700 annually, severely affecting family finances.
Notably, the JRF’s projections come against the backdrop of significant welfare cuts announced by the government, including a cruel £5 billion reduction to sickness and disability benefits. Critics argue that such cuts will exacerbate hardship and only deepen the inequalities experienced by the most disadvantaged groups in society.
In response to the JRF’s dismal projections, chancellor Rachel Reeves outrageously dismissed the findings.
Rachel Reeves: I know best
Speaking to Sky News, Rachel Reeves contended:
I reject that and the Office for Budget Responsibility will set out their forecast this week.
Reeves referred to the previous tory government’s tenure, stating emphatically
Living standards in the last Parliament were the worst ever on record.
Despite the alarming statistics presented by the JRF – perhaps one of the UK’s most esteemed think tanks – Reeves dismissed their insight out of hand.
Alfie Stirling, JRF’s director of insight and policy, painted a stark picture of the potential consequences of current government policies. He noted that Labour risks becoming “the first Parliament on modern record to see a fall in average living standards from start to finish,” should these trends continue unchecked.
Furthermore, he condemned the government’s proposed welfare cuts as “wrong” and counterproductive, advocating instead for a “minimum floor” in Universal Credit to alleviate hardship.
A looming catastrophe
The echoes of the JRF’s warning are compounded by a separate report from the Resolution Foundation, which similarly foresees families being £1,400 worse off by 2030, illustrating a broader consensus among economic experts regarding the grim financial landscape ahead.
Through these forecasts, the Resolution Foundation cautioned that failure to restore living standards could result in the government missing key targets outlined by Keir Starmer, which aimed to put “more money in the pockets of working people.”
As the chancellor prepares to deliver her Spring Statement, the stakes have never been higher. Analysts expect further cuts, such as £1.5 billion in civil service spending, and Reeves herself is eyeing up 10,000 job cuts.
However, the atmosphere is thick with uncertainty and concern, not just among economists, but also among the disabled community, jobseekers, and families who rely on social support during difficult times.
Featured image via the Canary
