Resolution Foundation projects weak income growth to 2029-30 with rising child poverty

The Resolution Foundation published its seventh annual Living Standards Outlook on 26 June 2025, projecting household incomes to 2029-30 using official economic forecasts and planned tax and benefit policies¹. In its central case, the typical non-pensioner income rises by just 1 per cent between 2024-25 and 2029-30 after accounting for inflation, which the foundation says would mean zero growth over the whole decade¹.

The report projects a strong real income recovery in 2024-25, but says that overall there has been a lost half-decade for income growth after 2019-20¹. It adds that the effects of the cost of living crisis are still present, with the prevalence of food insecurity in January 2025 still twice as high as in 2021¹.

Outcomes differ by income group, age and housing tenure. The poorer half of households are projected to be 1 per cent worse off in 2029-30 than in 2024-25 and 2 per cent below 2019-20 levels, while those on very low incomes are projected to be 8 per cent, or £1,000, worse off at the end of the decade compared with 2019-20¹.

On current policies, the child poverty rate is projected to rise from 31 per cent in 2023-24 to 34 per cent by 2029-30¹. The pensioner poverty rate was 16 per cent in 2023-24 and is not projected to rise¹. The foundation says removing the two-child limit, funded through higher taxes, would move lower-income households from negative to positive growth over the next five years and avoid a rise in child poverty¹.

Why it matters for households

The projections cover the five years to 2029-30 and describe how much typical households would have to spend after inflation, not cash amounts. A 1 per cent real rise for the typical non-pensioner household over five years is close to no improvement in living standards, and the report projects the poorer half of households ending the period slightly worse off than they started it¹. Very low-income households are projected to be £1,000 worse off than in 2019-20¹.

The differences by group matter because they fall on different budgets. Pensioner incomes are projected to rise 5 per cent and those of outright owners 4 per cent, while the typical mortgagor is projected to be 1 per cent worse off and the median child sees no income growth¹. The child poverty rate is projected to rise from 31 per cent to 34 per cent on current policies, a change that would affect families with children specifically¹. The report notes that the economic outlook would need to improve significantly to avoid the 2020s being a poor decade for income growth, and that targeted policy changes could directly improve the outlook for the poorest¹.

What happens next

The projections are based on the latest forecasts from the Office for Budget Responsibility and the Bank of England and on planned tax and benefit policies, and the report sets out four scenarios¹. It says more optimistic economic assumptions would improve the outlook, and that removing policy headwinds for lower-income households would directly help¹. No further dated decisions are set out in the report.