According to a think tank report, slow economic growth has resulted in household disposable incomes growing very slowly since 2010.

New analysis from the Resolution Foundation revealed that typical household incomes have increased by just £140 a year. This translates to a total rise of only 7 percent over the 14-year period, or an average of half a percent annually, in the amount people had left over to spend after paying tax.

In stark contrast, disposable incomes rose by 38 percent over the 14 years leading up to 2010, as noted by the poverty-focused think tank. However, the report highlighted that poorer households experienced stronger income growth than wealthier ones.

The Resolution Foundation attributed the slowdown to the 2008 financial crisis, the Covid pandemic, and high inflation, but also pointed out that general economic growth had been “sluggish.” This sluggish growth resulted in income rises “slowing to a crawl,” impeding progress in reducing poverty levels.

The state of the economy, particularly the strain on ordinary families due to the cost of living crisis, is a central theme in the upcoming general election. The Conservatives are defending their record in government since 2010.

Poorer households saw the strongest growth in their disposable incomes

The think tank’s analysis showed that poorer households saw the strongest growth in their disposable incomes during the period, partly due to the UK’s strong jobs market. The poorest fifth of households particularly benefited from last year’s one-off cost-of-living payments, contributing to larger income gains.

However, these gains were largely counterbalanced by what the report described as “regressive tax and benefits policy decisions,” leading to a total rise of just 13 percent in disposable incomes for poorer households over the period. In comparison, the richest households saw only a 2 percent increase in income growth over the 14 years.

The report also noted that data from Eurostat, covering a similar but not identical period between 2007 and 2022, indicated the UK had performed worse in terms of disposable income growth compared to several other leading European countries, including the Netherlands, France, and Germany.

Absolute poverty is decreasing at a slower pace

“While global economic shocks have been a major factor, Britain’s recent record is poor compared to both its own history and many of our European neighbours,” said Lalitha Try, an economist at the Resolution Foundation. “What little income growth Britain has experienced over the past 14 years has been driven primarily by rising employment, which has benefited poorer households the most.”

The report, titled Hard Times, was funded by the Nuffield Foundation, a charitable trust, and utilised data from the Department of Work and Pensions along with jobs, pay, and housing cost information.

It found that absolute poverty had decreased by 3.6 percentage points since 2010, but in the 13 years prior to 2010, it had fallen by 14 percentage points. Relative poverty levels have remained broadly stable over the last 14 years. However, the number of children in large families living in poverty has increased, while those in small families living in poverty has decreased.






Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.