The UK’s lackluster economic performance is weighing on disposable incomes among the poorest, the latest figures show
© Getty Images / coldsnowstorm
Britain’s poorest households are among the worst hit by the cost-of-living crisis as living standards are struggling to keep up with inflation, according to the latest figures released by the Office for National Statistics (ONS) Household Finances Survey on Wednesday.
The median disposable income for the poorest fifth of the population dropped 3.8% in the financial year through March 2022, while wages and benefit payments also failed to keep up with skyrocketing inflation.
The data exposes how the squeeze is increasing inequality in the UK as an unbridgeable gap opens up between the highest- and lowest-income households. It also shows the struggle to raise living standards since the nation voted to quit the European Union in 2016 as Britain’s slowing economy weighs on wages.
The median household disposable income declined by 0.6% from the 2021 financial year, with worse expected to come as inflation topped four-decade highs last November. By the end of the period covered by the ONS data, inflation had surged to 7%.
Meanwhile, the richest fifth enjoyed 1.6% growth versus a 3.8% drop for the worst off and a 2.4% slump for the second-poorest fifth of households.
© Source: Office for National Statistics – Household Finances Survey
Since the Brexit vote, living standards in Britain have barely increased. The poorest fifth have seen their median disposable income plunge from just above £16,217 ($20,027) in 2016-17 to £14,508 ($17,918) in 2021-22. By contrast, the richest fifth have gone from £63,201 ($78,044) to £66,002 ($81,503).
During the latest year, the increasing divide was driven by wages and salaries, which dropped 7.5% for the poorest households and grew by 7.8% for the richest.
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