JRF briefing projects worst parliament for living standards since 1961

The Joseph Rowntree Foundation (JRF) published a briefing on 8 October 2026 projecting that, on both scenarios published by the Bank of England in July, incomes after housing costs in 2029/30 will be between £440 and £770 a year lower than in 2024/25¹. JRF says either outcome would be the worst parliament for living standards since modern records began in 1961¹.

The briefing uses the Bank of England's "central" and "adverse" scenarios¹. In the central scenario, incomes after housing costs in 2027/28 are expected to be £180 (0.4%) lower than in 2026/27, at Q3 2026 prices; in the adverse scenario that fall is £460 (11%)¹. JRF reports that since the Bank's projection, oil and gas prices have moved close to the adverse scenario, with gas prices breaking 200 pence per therm and oil above $100 a barrel in mid-September¹.

JRF attributes the squeeze mainly to housing and energy costs. It says the lowest-income fifth of households spent 10% of their disposable income on energy, against 2% in the richest fifth, and that housing costs take up more than 40% of income in the poorest fifth compared with less than one tenth in the richest fifth¹. It also cites its May cost of living tracker, which showed a record 7.4 million low-income families went without at least one essential good such as food, heating or basic toiletries in the previous six months¹.

The briefing contrasts its figures with the Government's claim, made alongside the 2026 Spring Forecast, that people were "set to be £1,000 better off" per year at the end of the parliament compared with the beginning¹. JRF says the difference is largely explained by the treatment of children and housing costs: the Government figure uses real household disposable income per person, while JRF measures income at household level, and the RHDI series adds "imputed rents"¹. JRF says the OBR's RHDI per 16+ person series shows incomes rising by £830 over 2023/24 to 2029/30, against £1,260 per person at 2023 prices¹. It adds that its own projection for incomes before housing costs in 2029/30 is now over 1% worse (around £590 a year) than the equivalent Spring projection¹.

JRF sets out a policy package it says is fully funded, including an affordable energy guarantee, controls on rents and a protected minimum floor in Universal Credit¹. It says these measures would raise incomes in the lowest-income quintile by £1,020 a year at Q3 2026 prices, worth 7.6% of income in 2029/30, with those in the middle of the distribution £450 (1.2% of income) a year better off, and a one-off reduction in inflation of 0.5 percentage points¹.

Why it matters for households

The projections cover the parliament running to 2029/30, so the effects described are cumulative rather than a single-year change. JRF's central case has average incomes after housing costs falling by £180 in 2027/28, and by £440 to £770 a year by 2029/30 relative to 2024/25¹. The falls are not spread evenly: the lowest-income fifth is projected to be 4.3% worse off in 2029/30 than in 2024/25, even after the reversal of the two-child limit, because housing costs are projected to rise by £1,220 while real post-tax earnings rise by £550 for that group¹. JRF also says income in 2029/30 is projected to be below the level of a decade earlier on either scenario, against what it says would typically be expected growth of about £10,000 over the period¹. Energy costs matter more to lower-income households, which spent 10% of disposable income on energy against 2% for the richest fifth¹. The briefing notes that the 1 percentage point addition to inflation in the second half of 2026 reduces the real value of incomes in 2026/27 by roughly £440 for the average household¹. For context on how pay has moved against prices, see real wages, and on what a decent living is judged to cost, the Minimum Income Standard.

What happens next

The briefing is published ahead of the Budget, which it describes as presenting the Government with a challenge and a choice¹. JRF says the Bank of England published its central and adverse scenarios in July 2026, and that the Government quoted its £1,000 better off figure alongside the 2026 Spring Forecast in March¹. It says the deterioration in its own before-housing-costs projection is likely to be reflected in the OBR's next RHDI forecast, but no date for that forecast is given in the briefing¹.