Living standards set to drop by 2030 with low-income families suffering the most, charity warns

The analysis from the highly respected Joseph Rowntree Foundation believes this would represent the worst living standards record of any parliament since detailed records began in 1961.

The (JRF) has found disposable incomes will be on average £550 (1.3%) lower per year than in September 2024 and £570 (1.3%) lower than today.

And, in the decade between September 2019 and September 2029, families in the bottom third of incomes will see their disposable income fall by £1,110 per year (6.2%).

One of the Government’s key milestones was to “raise living standards in every part of the United Kingdom so working people have more money in their pocket” - which this analysis shows it is on course to break.

The JRF has modelled household disposable incomes by updating the March 2025 Office for Budget Responsibility (OBR) projections using the latest Bank of England forecasts. The Government tends to use Real Household Disposable Income to measure living standards.

These grim figures come ahead of Labour party conference and a Budget where taxes could have to be increased by £30 billion.

The JRF recommends taking numerous measures to address the decline in living standards, such as removing the two-child limit in Universal Credit and permanently unfreezing Local Housing Allowance.

Numerous Labour MPs are urging the government to take such measures - and LBC’s Natasha Clark has heard movement on the two-child limit could happen as soon as Labour party conference.

Chris Belfield, Chief Economist and Principal Policy Adviser at JRF, said: "Families need to see their living standards improve. They will likely vote for a government that makes this happen and punish one that fails to deliver. The last Labour government knew this and in their first term they pulled 300,000 children out of poverty alongside rising living standards overall, winning a further two terms.

“A decade that leaves families worse off isn’t inevitable. The government has recognised the gravity of the situation by committing to delivering higher living standards. It must introduce targeted policies like investment in social security, and interventions in key markets like housing and energy which affect people's financial security, if they are to stand by their commitment.”

A Treasury spokesperson said: “We know that the economy feels stuck for working people. That’s why we’re taking action to address the cost of living through our Plan for Change. Since July 2024, real wages have grown more than in the entire first decade of the last government, interest rates have fallen five times and real household disposable income is forecast to grow this parliament.

“But there is more to do which is why we are delivering free breakfast clubs, expanding free school meals and funded childcare, saving working parents up to £7,500 a year.”