Families may never recover from economic downturn

13 February 2013

In the UK, average earnings are now at 2003 levels, thanks to a lack of pay rises, the rising cost of living and increasing reliance on loans to try and get out of the mess, according to data from the Office for National Statistics.

And worse still, is that millions of families may never see their finances recover.

The Resolution Foundation said it could take as long as 15 years for living standards to recover to what they were pre-downturn. If things are to turn around, incomes would have to grow by a rate of 3.3 per cent, per year, which is never going to happen. While living standards worsen, the government is tightening our belts for us by reducing support for tax credits and benefits.

Families in the middle-to-low income bracket, according to figures, are not able to keep up with bills, with seven per cent behind on at least one bill and over half having no savings at all. With that in mind, if anyone is wanting the security of getting onto the property ladder, figures show that it would now take an average of 22 years to save for a deposit on a first home.

Matthew Whittaker, senior economist at the Resolution Foundation, said: "There is a long road to travel just to get back to where living standards stood before the crisis - and the prospects of actually recovering the ground lost over recent years appear vanishingly thin. Every extra month of falling household incomes is harder to take than the last as household budgets get closer to the edge."

A Which!!! survey has shown similar results. They showed that more than a third of people have increased their total level of debt in the past month, with six million households using their savings to cover bills or buy food.

 

TOPICS:   Banking   Investments   Debt

9 comments

  • OoOoooH Y.
    I'm encouraging my child to be a banker or an MP. That way they can be as crooked as they want and fuck up the country without getting penalised but will be rewarded handsomely.
  • jt
    I work for the NHS. If, in some point in the future, I start getting pay rises again, it will take 10 years just to get back to the level of take home pay I had 2 years ago, after rises in NI and pension contributions. That's not taking into account inflation.
  • Kevin
    And where did we get the assumption that things are supposed to get better? It's expecting that that causes problems. 2 quarters without growth is a recession but why do we assume that things should only be growing?
  • Archie
    Things won't get better. Your grandchildren will be making goods for the Chinese to buy.
  • Sicknote
    I've been saying this for a while now and I can't see the problem getting any better for my children; if I can offer any advice to anyone who will listen then I would say. Work hard, save as much as you and plan an exit from the UK.
  • Dick
    ^^ If they are lucky they'll be making goods for the Chinese to buy. Otherwise, they'll be giving them blowjobs.
  • Fat g.
    Mmm, you can't beat a nice Chinese. Well, you can if he pays you.
  • noshit
    I'm too much of a retard to realize it all goes in cycles. When loons come in and tell me i'm great and run up 1 trillion quid giving out money for fuck all. I think this will go on forever coz i like my holiday in turkey and spending 500 quid in Argos. So i spend every fucking thing i earn on dog shit. It's not my responsibility to understand how the wider world works... money grows on trees ffs.
  • Fat g.
    @noshit. Why are you spending all your money on bikes? Weirdo.

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