Households face five more years of falling living standards – what to do if you’re struggling

Households across the country could face another five years of falling disposable incomes, according to new research by the Joseph Rowntree Foundation.

In the five years to 2024, disposable incomes fell by 0.5% and the outlook isn’t great for the next five years either.

By 2029, the average family will be £550 worse off each year compared with 2024, with households with little to no savings expected to be hit the hardest.

What’s causing the fall in living standards?

There are three main reasons for the fall in living standards, according to the report. They include:

• housings costs which are rising quicker than inflation
• a fall in net earnings
• working-age households receiving less income from benefits

Couples with children are likely to be among the worst hit. Estimates suggest they’ll be £1,580 worse off per year by 2029, while single parents will be around £1,510 worse off.

Households in the bottom third of incomes could see their disposable income drop by around £1,100 per year by 2029 which represents a 6.2% dip.

In contrast, middle income households could see a decrease of £380 per year which represents a 1.1% decrease.

The JFR report does offer several reforms the government could look into to improve living standards, as well.

Suggestions include extending energy bill support, removing the two-child limit in Universal Credit, and setting a new minimum for Universal Credit so all households get a basic level of support.

But it remains to be seen whether the government takes any of these suggestions on board, and in the meantime, it’s down to families to deal with ever-falling living standards.

What can you do if you’re struggling to pay your bills?

There’s lots of support out there if you’re struggling to pay your bills. Here are just a few options to consider.

Use a benefits calculator to check what you’re entitled to

Lots of people simply don’t know what benefits they’re entitled to. This means they miss out on support that could make their lives a little easier. It’s worth using a free benefits calculator to fill in your details and see if there are any benefits you could be eligible for.

Speak to your suppliers about support they offer

Whether you’re struggling with water, energy, or even broadband bills, your suppliers typically have policies in place to help. This could include anything from hardship funds to the option to offer payment holidays if you’re going through a particularly tough period.

If you think you’ll struggle to make payments, your first port of call should be your supplier. Ring them and explain what’s happening. They can offer more help than you might think.

Tackle debt before it becomes a problem

Debt can feel overwhelming when you’re struggling with other bills already. But there’s lots of support out there and there are all sorts of debt solutions that could work for you if things are getting a bit much.

Contacting StepChange is a good first step if you’re struggling; it’s a debt charity which can offer free, impartial advice tailored to your specific needs.