Britons poorer than they were in 2019, as living standards continue to fall

Britons poorer than they were in 2019, as living standards continue to fall Disposable income is now more than £20 a month lower than it was six years ago after adjusting for inflation, according to new official figures. Image:Rachel Reeves delivered her second budget in November, including a promise to end the two-child benefit cap and an extension to the tax threshold freeze Monday 22 December 2025 17:52, UK The average person now has £38 less to spend each month after tax than they did at the end of 2024, following three consecutive quarters of falling UK living standards. The government made "improving living standards across all every part of the UK" one of their most high profile targets to achieve before the next election. The previous parliament, between December 2019 and July 2024, was the first in recorded British history to oversee a fall in disposable income in real terms . But disposable income is now £1 lower per month than it was in summer 2019 after adjusting for inflation, according to Monday's updated figures from the Office for National Statistics, and more than £20 lower than in December 2019. Disposable income is the money people have left over after paying taxes and receiving benefits (including pensions). Essential expenses like rent or mortgage payments, council tax, food and energy bills all need to be paid from disposable income. Before 2022 there had been only one five-year period where living standards fell. That was between 2008 and 2013, following the financial crisis and austerity policies that followed. There have been just five other occasions since the 1950s where disposable income fell for three consecutive quarters. Three of those were in the 2010s, with the others during the early 1960s and late 1970s. The longest sustained fall was five consecutive quarters between December 2015 and March 2017, coinciding with the UK voting to leave the EU. Simon Pittaway, Senior Economist at living standards think tank the Resolution Foundation, told Sky News: "Today's ONS data confirms that Britain's mini living standards bounce in 2024 is well and truly over. Growth has been poor this year and prospects for 2026 aren't looking great either. "Stepping back, Britain's big problem is that the country experienced three once-in-a-generation economic shocks in less than two decades [the 2008 financial crash, Brexit, and the cost of living crisis/COVID], with people in their mid-late 30s having spent their entire working lives lurching from one national crisis to another. "We need to avoid further shocks so that we can focus instead on boosting economic growth and lifting living standards." Sky News has been tracking the government's performance against some of their key economic targets, including living standards, inflation and growth. Despite the now three quarters of decline, living standards are up overall since Labour took office, after rapid growth in their first six months continued the trend of the final few months of the outgoing government. Inflation has risen however, and Britain is now the fourth-fastest growing G7 country...

Preview: ~500 words