Living standards in the UK are projected to see minimal growth throughout the remainder of the decade, with lower-income households likely to experience a decline. This warning comes from a report released by the Resolution Foundation on Thursday.

The report indicates that median household incomes after taxes, benefits (including pensions), and housing costs are expected to increase by just 1% above inflation by the fiscal year 2029/30. In contrast, families on lower incomes are anticipated to face a 1% decrease.

Households with mortgages may see their incomes drop by 1% as higher interest rates take effect for many borrowers. Conversely, homeowners without mortgages are predicted to enjoy a 3% rise in their incomes.

Pensioners are expected to be the biggest beneficiaries, with a forecasted income increase of 5%. Families with children, however, are not expected to see any growth in income.

Adam Corlett, the principal economist at the think tank, suggested that the forecasts might be overly pessimistic if economic growth exceeds expectations.

He noted that low-income households could benefit significantly if the government were to eliminate the two-child limit on certain family benefits, a policy introduced by the previous Conservative government.

Prime Minister Keir Starmer is contemplating removing this limit, though he has stated he will not reverse plans to tighten access to long-term sickness and disability benefits, a move that has faced opposition within his Labour Party.