Lower-income families in the UK could face a wait of more than a century to see their living standards double, according to new analysis from the Resolution Foundation, highlighting the scale of long-term income stagnation across large parts of the country.
The thinktank said it would take around 137 years for working-age households in the lower half of the income distribution to double their disposable incomes at the current rate of growth, raising fresh concerns about economic insecurity, social mobility and political instability.
The Resolution Foundation found that for four decades up to 2005, disposable incomes for lower-income working-age families grew steadily, increasing by an average of 1.8 per cent a year after inflation. Over that period, typical incomes doubled, and in the final decade before 2005, growth accelerated to around 4 per cent a year, putting families on track to double their living standards within less than two decades.
Since 2005, however, income growth has slowed dramatically. Disposable incomes for lower-income households, measured after taxes and housing costs, have risen by just 0.5 per cent a year on average. At that pace, the thinktank warned, another doubling in living standards would take more than 130 years.
The Resolution Foundation defines lower-income families as working-age households with disposable incomes below the national median and no one above state pension age. Around 13 million families fall into this category.
The group, described by the thinktank as unsung Britain, has seen higher participation in work since the 1990s and is increasingly providing unpaid care for disabled adults. Despite this, the foundation said these efforts have not been matched by meaningful improvements in pay or living standards.
Ruth Curtice, chief executive of the Resolution Foundation, said the findings showed that employment was no longer a reliable route out of financial hardship.
She said many lower-income families were working more but seeing little reward, as weak pay growth, rising living costs and increasing health and care pressures eroded their financial security.
The thinktank said the long-term slowdown had been driven largely by weaker pay rises. Average gross annual earnings for someone in a lower-income family have risen by £7,700 since the mid-1990s to around £18,000 today. However, almost three-quarters of that increase occurred before 2005.
Cuts to working-age benefits have also played a major role in reducing living standards, directly hitting household budgets and limiting income growth for poorer families.
The report also highlighted the growing health and care burden on lower-income households. Nearly one in three working-age adults in these families now has a disability, compared with fewer than one in five in better-off households. Around one million people in this group provide at least 35 hours a week of unpaid care for adult relatives or friends.
While income stagnation has affected households across the income scale, the Resolution Foundation found that taxes make up a smaller share of spending for poorer households, at 12 per cent of income, compared with 31 per cent for better-off families.
Council tax, however, remains a major pressure point. The poorest households spend around four times as much of their income on council tax as the richest, increasing financial strain on families already facing limited income growth.
The thinktank warned that without stronger wage growth and policy changes to support low-income households, living standards for millions of families risk remaining stuck for generations.