Labour's Disposable Income Drop: A 'Disaster' for Living Standards
Since Labour took office in July 2024, disposable income has seen a significant decline. This is the first time in British history that disposable income has decreased at the end of a parliamentary term. The Resolution Foundation calls this 'an unmitigated disaster for living spaces'.
Disposable income, the money left after taxes and benefits, has fallen by £40 per person since Boris Johnson's election victory in 2019. This is equivalent to the average weekly spend on food and drink. Despite an uplift in the last year, people are still £1 poorer on average than at the start of 2025. Lalitha Try, economist at the Resolution Foundation, attributes this to significant public spending cuts under the Labour government led by Keir Starmer. These cuts include ending winter heating subsidies for pensioners and proposed welfare cuts affecting disabled people. Despite some pushback and partial rollbacks, the overall trend suggests increased financial pressure on workers and disadvantaged groups in the united kingdom. Historically, living spaces have improved by an average of £115 per month between parliamentary terms since 1955.
The Office for National Statistics confirms a £40 drop in disposable income between December 2019 and July 2024. This decline, under the current government, is unprecedented in british airways history and has raised concerns about living spaces, particularly for lower-income households.
