As the UK teeters on the brink of economic decline, a new report warns that families across the country will face a bleak financial future by 2030. With rising housing costs and stagnant wages, the gap between rich and poor is expected to widen, leaving low-income households struggling to make ends meet.
The Grim Economic Analysis: UK Families to Fall Behind by 2030
A Bleak Future for Low-Income Households
New data from the Joseph Rowntree Foundation (JRF) paints a dismal picture of the economic future in the UK, warning that all families will be worse off by 2030. The analysis reveals that those on the lowest incomes will bear the brunt of this decline, with their disposable incomes expected to fall by 6% compared to the average family’s 3% decrease.
The Joseph Rowntree Foundation is a UK-based social change organization that aims to improve living standards by tackling 'poverty and inequality.'
Established in 1904, the foundation focuses on research, policy development, and grant-making to support vulnerable communities.
With a strong emphasis on evidence-based approaches, JRF works closely with policymakers, practitioners, and service users to drive positive change.
Key areas of focus include 'poverty reduction,' social justice, and community development.
The Consequences of Rising Housing Costs
The JRF‘s detailed analysis shows that the past year could mark a high point for living standards in this parliament. However, if living standards do not recover by 2030, Keir Starmer will have failed to pass his No 1 milestone and presided over the first government since 1955 to have seen a fall in living standards across a full parliament.
Keir Starmer is a British politician who serves as the Leader of the Opposition and the Leader of the Labour Party.
He was elected in April 2020, succeeding Jeremy Corbyn.
A former human rights lawyer, Starmer has been a Member of Parliament (MP) since 2015, representing the constituency of Holborn and St Pancras.
He has held various shadow cabinet positions, including Shadow Brexit Secretary and Shadow Secretary of State for Justice.
The analysis highlights that the poorest third are being disproportionately affected by rising housing costs, falling real earnings, and frozen tax thresholds. The average mortgage holder is set to pay about £1,400 more in mortgage interest annually, while the average renter will face a £300 increase in rent per year.
According to a report by the United Nations, over 1.6 billion people live in inadequate housing conditions worldwide.
In the United States alone, the median home price has increased by 50% since 2012, outpacing wage growth and leading to affordability issues.
Factors contributing to rising housing costs include urbanization, limited supply, and increasing demand for luxury properties.
The situation is further exacerbated by gentrification, displacement of low-income residents, and lack of affordable housing options.
A Call for Tax Reform
Alfie Stirling, director of insight and policy at JRF, argues that further cuts are not the way to reverse the trend of falling living standards. Instead, he suggests that Chancellor Rachel Reeves should consider raising tax for the wealthiest to address hardship and raise living standards directly.
‘There is no doubt the government is facing an unenviable list of economic pressures and uncertainties,’ Stirling said. ‘But how you manage these risks is a matter of political choice. It is wrong, and ultimately counterproductive, to try and rebuild the public finances through cuts to disability benefits.’
The Impact on Local Government
Local government leaders are among those most anxiously awaiting the spring statement, which they fear could reduce what they receive and tip more councils into bankruptcy. Councillor Louise Gittins, chair of the Local Government Association, warned that ‘without adequate investment now, we risk not being able to deliver crucial services that so many depend upon.’
A Labour Reputation in Shambles
The latest Opinium poll for The Observer shows that the damage being done to Labour’s reputation from its economic stewardship is severe. No single party leader is now trusted on the economy, with Keir Starmer and Rachel Reeves rated as the most distrusted.
While most voters say they do not trust any party on economic issues, the Tories are now marginally more favoured than Labour to run the economy and ‘improve your financial situation.’
