A new report out this morning by the Resolution foundation paints a picture that many families in Britain are seeing their incomes falling.

The Living Standards Audit 2018 found that typical incomes increased by just 0.9 per cent (after housing costs) in 2017-18.

This is extremely weak, representing less than half the average annual growth rate recorded between 1994 and 2007.

The combination of a benefit freeze and above-target inflation means that real household incomes fell by 0.5 per cent to 1.5 per cent among households in the bottom third of the income distribution in the estimate.

And incomes in the top half are estimated to have grown by around 0.4 per cent.

Such a hit to living standards says the authors, is clearly worrying, particularly coming so soon after the last recession.

Relative child poverty may have risen to its highest rate in at least 15 years, despite high levels of employment according to the report.

In 2003, households on the lower half of incomes typically earnt £14,900 but in 2016/17 that figure had fallen to £14,800.

The survey also revealed that over 40% of low to middle income families feel they would be unable to save £10 a month and over 35% would be unable to afford a holiday for one week with their children.

The survey found that £37 billion (almost £1 in every £5 spent) of benefit spending is under-reported.

Worse, this gap has grown in significance over time. For working-age households, the gap has grown from under 2 per cent of their (reported) household income around the turn of the millennium to over 4 per cent in the 2010s.

And for pensioners, for whom benefits are typically a larger share of income, the gap has grown over recent years to 8 per cent.


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