This makes a very good point. Although a world where we only ever indexed welfare to prices would be one with ever increasing income inequality offset in part by ever improving public services.
(Our income projections here use a concept of income consistent with the DWP's HBAI dataset. See our overnight response document for how this compares with RHDI, a different living standards measure that the Government tends to headline on (plus lot's more great stuff on this "non-event"!))
...however, our projected annual rate fall of 0.1 ppts falls short of the 0.3 ppt and 0.4 ppt falls achieved by those Governments
This flatters the Government's (projected) record on child poverty compared to past Govts. Our projected annual fall of around 50k children in poverty this Parliament would exceed the 19k and 37k annual declines achieved by the Labour Governments of the 2000s...
This modest fall contrasts with a more substantial projected fall of 260k in the number of children in poverty. Much of this is driven by an expected 600k fall in the UK child population from 2024 to 2029. Without this decline, we estimate the number of children in poverty would fall by 70k instead
And after big success on child poverty in 2026-27 thanks to scrapping the 2 child limit, progress is set to stall across the rest of the Parliament as the rate creeps up, leaving projected child poverty in 2029-30 just 0.5 percentage points below what the Government inherited in 2024-25.
This is largely driven by OBR’s pessimistic wage growth forecast. Using the Bank of England's more optimistic forecast of 3.5% real pay growth over the next 3 years (vs 1.4% for the OBR) would mean the median non-pensioner incomes grows by £200 between 2026-27 and 2028-29, instead of falling.
And after next year, the outlook for the rest of the Parliament is gloomy even before considering events in the Middle East. Income growth is set to turn negative across the distribution, with median incomes for non-pensioners falling by 0.5% (£150) between 2026-27 and 2028-29.
But events in the Middle East could undermine this. If higher energy prices seen so far are maintained it could add £500 to typical energy bills for households on a price cap tariff. This would disproportionately impact lower income families, who spend more of their income on energy
There was strong income growth in the first year of the Parliament, especially for the top half, thanks to strong wage growth and the last Government's NICs cuts. And we project strong progressive income growth in 2026-27, driven by the repeal of the 2 child limit and the above-inflation UC increase
Our updated living standards projections based on the OBR's new forecasts show that, if these forecasts were to hold, the answer would be "yes" for the typical family when we compare the end of the Parliament with the start. But the full story is more nuanced...
In her speech yesterday, the Chancellor said the question people will be asking themselves at the next election is "are me and my family better off?"
So what is the answer likely to be? 🧵
I'm now officially a substack guy...
Excited to be finally launching our new report on agricultural decarbonisation tomorrow morning - 9:30 online or in person for anyone who wants to join!
🐑🚜🐮
www.resolutionfoundation.org/events/net-z...
We're almost a week away from the biggest event of the year: The @resolutionfoundation.org Unsung Britain conference, where we'll be telling you all about the book we're launching on the 13 million working-age families across the poorest half of the country. Be there or be 🟦. Sign up here:
Multiple people not including me as I knew how to spell it already
According to Jonny Roberts, a @changingrealities.bsky.social participant and Universal Credit recipient, the system is too often defined by a lack of trust.
But there are better (and simpler) ways of doing things, especially when it comes to childcare ⤵️
@lalithatry.bsky.social Just to be clear, I was saying pay cheque not paycheck, despite what the subtitles say
🧵 on new analysis w/ @resolutionfoundation.org on why if Universal Credit is to be improved it is time to ‘listen and learn’ to experts like@changingrealities.bsky.social
For more on why govts should move from a ‘test and learn’ to a ‘listen and learn’ approach 📚 academic.oup.com/ooec/article...
We discussed this report with one of the architects of universal credit (Stephen Brien), a changing realities participant (Jonny Roberts) and a welfare rights adviser (Corin Hammersley). They all agreed that we need to continue to improve universal credit as roll-out completion finally completes.
Some of the recommendations are small tweaks to how the system operates, while others represent bigger structural changes.
But as UC is here to stay, it's vital that fits around the lives of those who rely on it, and we think the ideas in this report would be substantial improvements.
We've aimed to produce recommendations that are grounded in claimants' experiences, realistic in that they work within the current system, and are not prohibitively expensive.
Our new report on Universal Credit is out today. We worked with participants from @changingrealities.bsky.social to develop 16 recommendations for how outcomes for and experiences of UC claimants can be improved.
This thread has the details!
This is tomorrow! Come along to RF towers in the morning, it sign up to watch online
Research Training Programme 2026 12-week training programme February - April 2026 Westminster Applications are invited from Black, Asian and Minority Ethnic graduates Apply by: 08:59 am Friday 30 January 2026 Full details can be found on the Opportunities page of the Resolution Foundation website
Applications for our Research Training Programme 2026 are now open.
Black, Asian and Minority Ethnic graduates are invited to apply for a 12-week training programme based in our Westminster office and paid at the London Living Wage.
Details here 👉 buff.ly/nHoxxJM
Good news - DWP has finally published UC Health data, splitting out those who have migrated over from legacy benefits (ESA).
What does the data tell us?
ESA migration accounts for most of the rise in UC Health claims over the past year - but new claims explain more of the rise since the pandemic.
@lalithatry.bsky.social and I ceremoniously set the parameter for the two-child limit to 'off' in our default 'current policy' version of the IPPR tax benefit model the other day. Felt cathartic.
The existence of the two child limit has, rightly but unfortunately, dominated poverty analysis for the last 8 years. Looking forward to doing this work in a post-two child limit world.
Our updated child poverty projections following the publication of the Strategy show a significant fall next year and a decline over the whole Parliament. Still more to be done, but this is a good achievement in the face of significant headwinds and a tight fiscal position
Chart showing: Change in annual income in cash terms (left axis) and as share of income (right axis), as a result of tax and benefit policy changes announced since Autumn Budget 2024, by income vigintile: UK, 2029-30
This Budget was undoubtedly a progressive one.
The combination of tax rises and giveaways since last year’s Budget means that incomes for households in the bottom half of the distribution rise by 1.0 per cent while incomes for the richer half fall by 0.7 per cent.
But beneath the surface...
