Poorest families predicted to be hundreds of pounds worse off by 2029

Average disposable income levels are predicted to drop by more than £400 by 2029 – with lowest-income households hit the hardest, new analysis from the Joseph Rowntree Foundation (JRF) has found.

The research also shows that the poorest 40% of struggling families are currently around £300 worse off than before the pandemic.

It suggests that by 2029, these families could be £750 out of pocket.

The current situation

As of October 2024, around 7 million low-income households are struggling, a number that has remained  steady for three years.

Many of these households are unable to afford basic needs, such as heating, while more than 5 million reported not having enough food in the past month.

Looking ahead

No households expect their disposable incomes to rise when housing costs are considered.

The poorest 20% will experience a notable decrease, while those in the middle-income bracket may manage to stay about the same.

Housing costs on the rise

A major problem is the increasing cost of housing.

By 2029, the poorest 40% of people will be paying about £470 more for housing than they did ten years ago.

This situation means:

• Over three quarters (76%) of low-income renters have had to skip essential items.
• 71% of low-income mortgage holders are in the same boat.
• More than half (52%) of low-income renters and 44% of low-income mortgage holders have missed payments on their bills.

Families at risk

Some families are bearing the brunt more than others, e.g:

• 85% of low-income families with three or more children are going without essentials.
• 62% of these families are in arrears on at least one bill.

What needs to change?

Rachelle Earwaker from JRF says the government needs to act swiftly to stop living standards from getting worse.

“If the government fails to address current levels of hardship and ensure that households have money left in their pockets after paying their rent or mortgage, then more and more families will face the indignity of not being able to pay their bills or afford all the essentials, like warm clothes or hot showers, because there simply isn't support available,” she said.

Earwaker added: “They [the government] must take action to protect the households on low incomes who are set to see the biggest declines in living standards, and work to embed economic security for all."

Support when you need it most

If you’re struggling to pay for essentials, don’t worry. There are options out there to help you get back on your feet.

Food banks

If putting food on the table feels impossible, consider reaching out to a food bank.

You can get a referral from professionals like:

• your GP
• health visitor
• social worker
• Citizens Advice

Your local food bank can tell you who they work with in your area. They’re often more than happy to help.

Household support fund

Every local council in England has funds set aside to support people in need due to the cost-of-living crisis.

What they provide varies by council, but it often includes help for:

• food
• bills
• beds for children

Get in touch with your local council to see what support they can offer.

Help with energy bills

If your energy bills are giving you a headache, speak to your supplier.

Many energy companies have grants for customers who are struggling or can direct you to organisations that do.

For more details, check out our guide on financial help from your energy supplier.

Charitable grants

Various charities offer grants that you won’t need to repay. It’s worth seeing if you qualify for one.