Young families were particularly hard hit by an “abrupt” slowdown in living standards in the year before the general election, a think tank says.
The Resolution Foundation found that average income growth halved to 0.7% during that period compared with the previous year. Those aged 25-34 were worst hit, it said, with their average incomes no higher than they were in 2002-03.
The Treasury said it was taking “concrete steps” to help families.
The Resolution Foundation analyses living standards, and says its goal is to improve outcomes for people on low and modest incomes. It said young families were the only group whose incomes have failed to return to pre-financial crisis levels.
Pensioner incomes grew by 30% over that 15-year period, the think tank said.
‘Bleak economic backdrop’
“The typical 25 to 34-year-old appears no better off today than in 2002-03,” the report said.
“In comparison, typical incomes for all other age groups are now above, or very near, their pre-recession peaks.”
The fall in average income growth followed a “mini-boom” between 2013 and 2015, the foundation said, when living standards improved. Families in rented accommodation have experienced little or no income growth, while home-owners had a 1.7% growth, the report found.
A Treasury spokesperson said the government was taking action to increase people’s incomes and help families “keep more of what they earn”.
The Treasury said: “We have cut taxes so a basic rate taxpayer pays £1,000 less income tax compared to 2010 and introduced the National Living Wage which means £1,400 a year extra for a worker.” Read more
