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UK Living Standards Decline, Poorest Areas Now Lag Behind Slovenia and Malta

A decade of stagnant productivity and welfare cuts has eroded Britain's status as a high-income nation, according to a new report by NIESR.

A drone view shows construction work taking place on new homes at Whitstable Heights a new housing development, as the UK government aims to build 1.5 million new homes, in Whitstable, Britain, September 11, 2024. REUTERS/Chris J. Ratcliffe/File Photo
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The past ten years are the first time in more than half a century where real incomes did not grow by a meaningful amount

Overview

  • The National Institute of Economic and Social Research (NIESR) found that Britain's poorest districts now rank below low-income areas in Slovenia and Malta when adjusted for cost of living.
  • Stagnant productivity growth and welfare cuts since the 2008 financial crisis have contributed to minimal real wage increases and declining living standards in the UK.
  • The UK now ranks among the least generous welfare systems in the OECD, with benefits falling short of covering essential household costs in 12 of the last 14 years.
  • NIESR estimates that UK workers could be £4,000 better off annually if productivity growth matched that of the United States.
  • The report calls for policy changes, including raising income tax thresholds and removing the two-child limit on benefits, to address poverty and stimulate economic growth.