UK only halfway through cost of living income squeeze – worst to come

Grim analysis from the Resolution Foundation think tank suggests that a typical household will see their disposable income drop by £2,100 over a two-year period< /p> The average household across the country will be left with £2,100 worse off by the end of the next financial year. (

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Cash-strapped households are only halfway through a grim two-year income crisis, according to a new study released today.

Analysis by the Resolution Foundation think tank suggests that a typical household would lose £2,100 over a two year period.

The authors said the disposable income of working-age families is expected to fall by 3% in the current fiscal year.

They warned that it should be followed by another 4% impact over the next 12 months.

Although inflation is expected to fall rapidly in 2023-24, the Resolution Foundation says this will be offset by higher energy bills, frozen tax thresholds and rising mortgage costs to three million of households.

In grim conclusions, the think tank said typical household incomes could still be below pre-pandemic levels even by 2027-28.

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With the biggest impact yet to come, they also highlighted survey results showing that 23% of adults said they could not afford to replace or repair their fridges, washing machines or other large electrical appliances.

Researchers also found that 11% said that at some point in the past month they were hungry because they didn't have enough money.

Lalitha Try, a researcher at the Resolution Foundation, said: "Low-income families have been hardest hit by soaring energy bills and food prices, and are the most likely to have seen their financial situation and their health deteriorate.”

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