Young families ‘hit by income slowdown’

LONDON: A new report has exposed stark divides in the economic experiences of young and old Britons and between renters and home-owners over the year running up to last month’s general election.

The Resolution Foundation said that an “abrupt” slowdown in living standards for young and lower-income households provided a “bleak backdrop” for the shock outcome of the June 8 poll, when these groups are thought to have turned against the Government in large numbers to deny Theresa May a majority.

The think tank found that average income growth halved to 0.7% in the year before the election, following a mini-boom between 2013 and 2015.

Britain has been a tough place for the living standards of young people over the last 15 years – incomes today are no higher than in 2003 pic.twitter.com/eC0e0ejtiv

— ResolutionFoundation (@resfoundation) July 15, 2017

But young families aged 25-34 were worse hit than others, with average incomes in this group no higher than they were in 2002/03 – a 15-year period which has seen pensioner incomes grow by 30%. Young families were the only group whose incomes have failed to return to pre-crisis levels, said the report.

Incomes among low- to middle-income families grew by just 0.4% over the year, compared to 1% for those in the top half of the income distribution.

By contrast, the top 1% of households enjoyed a “rapid recovery” in incomes, and are now on the brink of having a record share of the nation’s income at 8.7%, only fractionally below the 8.9% recorded in 2009/10.

Meanwhile, families in rented accommodation, whether private or social, have experienced little or no income growth in recent years, while home-owners with mortgages enjoyed above-average income growth of 1.7%, according to the think tank.