An impending recession will hit millions of the most vulnerable households, a leading think have warned.
The National Institute of Economic and Social Research said households with no savings are set to double to 5.3m by 2024, while real wages will fall by 2.5% in 2022 and remain more than 7% below their pre-Covid trend beyond 2026.
The independent think tank also said the number of households living pay day to pay day will almost double from 3.9m to 6.8m – a 25% rise by 2024
Gas price rises and the escalating cost of food would send inflation to 11% before the end of the year while the retail prices index (RPI), which is used to set rail fares and student loans repayments, is expected to hit 17.7%.
The report said the number of households with no savings was set to double to 5.3 million, or one in five, by 2024.
Some 1.2 million households face destitution in the coming year, whose food and energy bills will exceed what is left of their income after paying for housing and tax.
The authors are calling on Conservative leadership candidates to offer more financial support to the most vulnerable in the form of an extra £200 for energy bills and an increase to Universal Credit payments, as was offered in the pandemic.
NIESR Director Jagjit Chadha said ordinary Britons would pay the price for years of what he viewed as under-investment in public services, which had left them vulnerable to successive economic shocks like Brexit, COVID-19 and the war in Ukraine.
