Living standards ‘not likely to improve for at least five years'
The Resolution Foundation has painted a stark picture, suggesting the current "bust, boom and bleak outlook" could see the 2020s become "the first decade of the modern era to witness no improvement in disposable incomes across Britain."
The grim forecast suggests that the tough start to the decade, marked by economic volatility, risks leaving typical households in a stagnant financial position.
In its "central scenario," the think tank projects that the typical annual real income of non-pensioners is set to grow "only slightly" over the five years after 2024-25, amounting to just 1 per cent overall, or a cash increase of around £300 in total.
The immediate future appears particularly challenging. The Living Standards Outlook 2025 report, funded by Nationwide Building Society, states: "Our outlook for 2025-26 specifically remains poor with income flat (0 per cent growth)."
This stagnation is attributed to a combination of factors, including frozen tax thresholds and rising council tax, which are "cancelling out real pre-tax earnings growth for many, even before accounting for water, rent and mortgage rises."
The report continued: 'Taking into account the cost-of-living crisis, the typical income in 2029-30 would remain essentially unchanged (0 per cent growth) compared to 2019-20.
'This would clearly make the 2020s the worst decade out of the past six for living standards growth.'
The outlook for the lower-income half of the non-pensioner population is worse in the years ahead, according to the projection.
The foundation said the average real incomes of this group could be 1 per cent (£200) lower in 2029-30 than in 2024-25.
Within the weak outlook overall, some parts of the population are expected to fare better, the report said.
The typical pensioner income is projected to rise by 5 per cent between 2024-25 and 2029-30, with a £1,500 increase.
Housing tenure also plays a key role in determining the outlook, according to the research, with mortgage holders set to see income falls as they come off fixed-rate deals, while outright homeowners are expected to see a boost to their living standards.
The projection for weak income growth over the second half of the decade follows a 'rollercoaster' first half, in which living standards were rocked by Covid-19 and the cost-of-living crisis, according to the foundation, which is focused on improving living standards for households on low to middle incomes.
It said there was a 'mini living standards boom' as incomes grew by 4 per cent (£1,300) in 2024-25.
The foundation also said that the economic outlook could improve, with policies potentially offering a 'helping hand' to lift living standards for poorer households.
Adam Corlett, principal economist at the Resolution Foundation said: 'The living standards story of the decade so far has been bust and boom, with Covid-19 and a cost-of-living crisis followed by a much-needed recovery last year. But the rest of the decade looks bleak, with typical household incomes set to grow by just 1 per cent over the next five years.
'There are winners and losers within this weak outlook, with pensioner incomes set to grow by a healthy 5 per cent over the rest of the decade, while the poorest half of the population are set to see their incomes fall.
'But a stronger economy and the right policy interventions can brighten this outlook. Maintaining strong wage growth and returning to pre-pandemic employment levels would make middle-income Britain far better off, while ending the two-child limit can lift living standards for poorer families.'
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
14 minutes ago
- Daily Mail
Starmer joins Trump on Air Force One
Keir Starmer joined Donald Trump for a 250-mile flight in Air Force One so they could have dinner together tonight, after the president told the PM how to win the next election. The Prime Minister waved as he boarded the US presidential Boeing 747 at Prestwick tonight after talks and a chaotic press conference at Trump's Turnberry golf resort. The president advised his 'not too liberal' friend to cut taxes and immigration if he wanted to beat Nigel Farage at the next election. And he gently pressed the PM on giving the go-ahead for new oil and gas exploration in the North Sea, while slamming funding for wind power . The PM stood up for green energy hours before boarding the aging American behemoth, which is built for long-haul journeys rather than a short hop across Scotland. 'We believe in a mix, and obviously oil and gas will be with us for a very long time, and that'll be part of the mix, but also wind, solar, increasingly nuclear (power),' he said. The flight will land at RAF Lossiemouth, due to Aberdeen Airport having too short a runway for the 747. It was the PM's second flight of the day, having arrived in Scotland from Switzerland, where he watched the Lionesses retain their Women's Euros title last night. Without any awkwardness about playing one mate off against the other the president used the hour-long televised bromantic encounter to tell the PM to cut taxes and stop 'murderers and drug dealers' from coming to Britain. While Sir Keir sat beside him with an impassive look on his face he also attacked subsidies for wind power and - gently - suggested he should back fresh drilling for oil and gas in the North Sea instead. He was full of praise for the Prime Minister and the way he was running the country, despite their ideological differences, saying Sir Keir was was 'liberal ..but not too liberal' in his approach. Mr Trump added: 'I think the one that's toughest and most competent on immigration is going to win the election, but then you add… low taxes, and you add the economy. '(Sir Keir) did a great thing with the economy, because a lot of money is going to come in because of the deal that was made. But I think that, I think that immigration is now bigger than ever before.' The president had earlier told Sir Keir Britain and the rest of Europe it must stop illegal immigration to avoid 'ruin' as the two leaders met in Scotland today. Mr Farage is not meeting Mr Trump during the visit. The American leader attacked Mayor of London Sir Sadiq Khan as a 'nasty person' and hailed both Sir Keir and Nigel Farage as 'great men' as the leaders took a series of questions across domestic and foreign affairs. The president also indicated that the US may not impose heavy tariffs on British pharmaceuticals, telling reporters that 'we certainly feel a lot better' about the UK working on drugs that will be sold in the States compared to other nations. The president had earlier said that he thinks Sir Keir, who has been in office for more than a year, will be 'a tax cutter.' The president had earlier spoken out as he met Sir Keir and Lady Victoria on the clubhouse steps at his Ayrshire golf course. During the president's 'working holiday' in the country of his mother's birth he spoke to reporters as bagpipes played in the background. He spoke out about the humanitarian crisis in Gaza - which the leaders will discuss further - and had criticism for Vladimir Putin over the Ukraine war. But he also addressed the wider issue of immigration facing Europe he added that it was becoming a 'different place' - and praised Sir Keir for taking a strong stance against it. 'This is a magnificent part of the world, and you cannot ruin it, you cannot let people come here illegally,' the president said. 'And what happens is there'll be murderers, there'll be drug dealers, there'll be all sorts of things that other countries don't want. 'They send them to you and they send them to us and you've got to stop them and I hear you've taken a very strong stand on immigration. And taking a strong stand on immigration is imperative.' The latest data from the Home Office indicates that 122 people crossed the Channel in small boats on Saturday. Security was tight at Turnberry as they discussed how to continue putting into place the US-UK trade deal they signed earlier this year, as well as the Middle East crisis. They met on the steps of the clubhouse while a bagpiper playing loudly in the background, with the president saying Sir Keir was going a 'great job'. He also said he did not mind Sir Keir 'taking a position' on Palestinian statehood, though he said he would not do so himself. The president rejected Israel's claim there is 'no starvation' in Gaza, saying that images of famine in the occupied territory could not be fake. He said Gaza was 'a mess' ahead of talks about the deepening humanitarian crisis. They piled pressure on Israeli PM Benjamin Netanyahu, who yesterday insisted 'there is no policy of starvation in Gaza, and there is no starvation in Gaza' Images and warnings of starvation emerging from Gaza in recent days have piled pressure on the Israeli government over its conduct in the conflict. But Trump called for food to be allowed into Gaza immediately. He said he was not convinced by the Israeli denials, adding: 'That's real starvation stuff... and you can't fake that.' The PM, who was due to present to Mr Trump a UK-led plan to bring peace to the Middle East, added it was an 'absolute catastrophe'. Sir Keir held crisis talks with French President Emmanuel Macron and German Chancellor Friedrich Merz over the weekend. Britain is working with Jordan to airdrop aid into Gaza and evacuate children needing medical assistance, with military planners deployed for further support.
Reuters
14 minutes ago
- Reuters
Exclusive: Buyout groups explore sale of British wealth manager Evelyn, sources say
LONDON, July 28 (Reuters) - Private equity firms Permira and Warburg Pincus are exploring the possible sale of Evelyn Partners, one of the UK's largest wealth managers, three sources with knowledge of the matter said. The owners are working with advisers to prepare for a potential sale of the London-based business towards the end of the year, two of the people said. It could be valued at more than 2.5 billion pounds ($3.36 billion) in a sale, one of the people said. A sale could draw interest from UK banks and private equity investors as well as Canadian and U.S. financial institutions, one of the sources and an industry specialist said. The sources, who requested anonymity because the matter is private, cautioned that the discussions are at an early stage and that no deal is guaranteed. Permira, Warburg Pincus and Evelyn declined to comment. A sale of Evelyn would be the latest in a wave of deals across Europe's wealth management industry as companies hunt for scale and investors look to tap into rising demand for personalised financial advice. Across Europe, 113 asset and wealth management deals were struck in the first six months of 2025, up from 90 in the same period last year, according to data from EY. Deal value also rose to $2.7 billion this year, from $1.9 billion in the same period last year, the data shows. Permira shifted its stake in Evelyn into a continuation fund in 2023, Reuters previously reported. The shareholders had reportedly the year prior considered a sale or initial public offering of the London-based company, but a transaction never materialised. Since then Evelyn has been selling assets. In November 2024 it announced the sale of its accounting business to Apax Partners to refocus on wealth management. It also said it sold its fund solutions business to Thesis in January. Evelyn generated adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of 174.3 million pounds in 2024, an increase of 11.8% from a year earlier, driven by net inflows and investment performance, according to its latest results in March. Permira has owned Evelyn Partners, formerly known as Tilney Smith & Williamson, since 2014, funding its growth from a 5-billion-pound wealth manager to one overseeing 63 billion pounds in client assets. Warburg Pincus became a minority investor in 2020 to fund a merger between Tilney and accounting firm Smith & Williamson. The remainder of the shares are held by current and former staff. Wealth management assets in North America are valued more highly than in the UK, where the pound is also cheaper than the dollar, handing potential U.S. bidders firepower to pay more, one of the three people said. In Europe, wealth managers trade at 15 to 17 times EBITDA compared to around 20 times EBITDA in North America, this person added. U.S. companies have previously targeted the sector including Royal Bank of Canada ( opens new tab, which bought, opens new tab Brewin Dolphin for 1.6 billion pounds in 2022. U.S. financial group Raymond James also struck a 279 million pound deal to take over wealth manager Charles Stanley in 2021. ($1 = 0.7444 pounds)
Reuters
14 minutes ago
- Reuters
EU-US trade deal could add up to $19 billion in pharma industry costs, analysts say
July 28 (Reuters) - The European Union's trade deal with the United States could cost the pharmaceutical industry between $13 billion and $19 billion as branded medicines become subject to a tariff of 15%, analysts said on Monday. The added costs could raise prices for consumers unless pharmaceutical companies take action to mitigate the impact of the tariffs, one of the analysts said. Pharmaceuticals had historically been exempt from duties. Medicines are the largest European exports to the United States by value and the EU accounts for about 60% of all pharmaceutical imports to the U.S. On Sunday, European officials said that a bilateral trade deal for an across-the-board 15% tariff included pharmaceuticals, except for some generic drugs, which would be subject to no tariffs. The U.S. has been conducting a national security investigation into the pharmaceutical sector and the industry has been bracing for separate sectoral tariffs. President Donald Trump said earlier this month, before negotiating the bilateral deal, that pharmaceutical tariffs could be as high as 200%. Some Wall Street analysts said that they do not expect additional tariffs on the EU as a result of the investigation, but others cautioned that the deal was not yet signed and that several questions remained unanswered. UBS analyst Matthew Weston said that he expects details of the trade deal to include protective measures for EU pharma exports from the U.S. investigation, especially since such measures are being discussed in negotiations with the United Kingdom and Switzerland. ING analyst Diederik Stadig also said that while tariffs on top of the 15% were not expected, even after the conclusion of the national security investigations, nothing is completely clear "until a trade deal is inked." Stadig estimates that these levies could add $13 billion to industry expenses without any mitigation strategies, and some of that could be ultimately borne by the consumer. Bernstein analyst Courtney Breen puts the additional expenses at $19 billion for the industry, but she notes that companies might be able to absorb some of the costs with the measures they have been implementing — such as stockpiling of drug products and new deals with contract researchers. Earlier this month, Sanofi ( opens new tab said it will sell a manufacturing facility in New Jersey to Thermo Fisher (TMO.N), opens new tab, where the French drugmaker's therapies will continue to be manufactured. Roche's (ROG.S), opens new tab CEO Thomas Schinecker said last week that the company was increasing its U.S. inventories to avoid any immediate disruption from tariffs. UBS' Weston said that it was not immediately clear which generic drugs were exempted from duties under the deal, but any impact for generic drugmaker Sandoz (SDZ.S), opens new tab for this year should mostly be manageable. Shares in pharmaceutical companies Sanofi, Roche and Sandoz Group all closed up between 0.5% and 1% on Monday.
