UK living standards to fall for three years, Resolution Foundation warns

British households are set to endure a prolonged squeeze on their finances, with the Resolution Foundation warning that real disposable incomes will fall over the next three years. The think tank’s analysis points to a combination of high inflation, rising taxes, and weak wage growth that will leave families worse off than before the pandemic. The projections mark the worst sustained drop in living standards since records began, with lower-income households hit hardest by soaring energy and food bills. The Foundation’s researchers say the pain will be felt well into the mid-2020s, undermining the government’s promises to level up and boost prosperity. Despite recent falls in wholesale gas prices, the lag in household energy tariffs and the withdrawal of support schemes mean many will still face higher costs this winter. Economists warn that without targeted intervention, the erosion of disposable income will deepen inequality and dampen consumer spending, further stalling economic recovery. The coming years will test both household resilience and policymakers’ ability to cushion the blow.