Institute for Fiscal Studies: Living Standards, Poverty and Inequality in the UK 2018

If slow growth in productivity is the ‘new normal’, the same will be true for living standards growth.

This is according to the Institute for Fiscal Studies June 2018 report; Living Standards, Poverty and Inequality in the UK.

The report looks at changes in living standards for different groups,  income growth and distribution, income poverty and deprivation, poverty of working-age adults in poor health and the impact of the of the National Living Wage (NLW) on living standards.

Key findings include:

  • Data indicates little growth in real earnings, and slow average income growth is likely to continue over the next few years.
  • Income inequality is substantially higher than it was in the 1960s, but roughly unchanged from the 1990s. Forecasts indicate that inequality is likely to increase in coming years.
  • Absolute income poverty has reduced, but relative income poverty has increased for households with children. This is due to higher employment rates and higher housing costs.
  • People with longstanding mental health problems more than twice as likely to be in poverty as those without. Read the press release about health, poverty and inequality.
  • The introduction of the NLW caused strong wage growth among low-wage employees, but growth in living standards was much weaker due to higher taxes and lower benefit entitlements.

Read more or Download the report (pdf).