The UK is in the midst of a crisis in living standards. Too many people do not have reliable access to the resources they need to meet the day-to-day costs for a decent quality of life. This was true before Covid-19, but the pandemic and the associated economic downturn have seen things exacerbate over the past 12 months. New forecast modelling produced for this report shows that by the end of the year, and without a change in government policy, 32% of the UK population – 21.4 million people – will be living below a socially acceptable living standard, as measured by the Minimum Income Standard (MIS). The MIS, the UK’s only needs-based approach to measuring living standards, identifies what needs must be met for an individual to thrive in the society in which they live.
The effects of the Covid-19 pandemic followed a decade of stagnant growth in real earnings; rising housing costs for renters; and freezes, cuts, and caps to working-age benefits, particularly those received by families with children. This served to hold down the living standards of the poorest, while widening inequalities across the population as a whole, making the UK an international outlier on poverty – the extent to which the poorest families fell below the poverty line was the second highest among 37 members of the Organisation for Economic Cooperation and Development (OECD). Across the two decades leading up to
— source neweconomics.org | Sarah Arnold, Aidan Harper, Alfie Stirling | 17 Jun 2021