UK Living Standards Review 2025
Think tank: National Institute of Economic and Social Research (NIESR)
Author(s): Max Mosley; Ryan Wattam; Carol Vincent; Adrian Pabst
March 12, 2025
This report from UK think tank the National Institute of Economic and Social Research looks at living standards in the UK.
The United Kingdom is currently neither a high-wage nor a high-welfare country, leaving millions trapped between low wages and inadequate support.
The research estimates that around half of the stagnation in real wages can be attributed to weak productivity growth (TFP). Weak productivity is costing UK workers £4,300 per year: had UK wages grown as they did in the US after the 2008 financial crisis, UK workers would be more than £4,000 better off today. It also lays bare the extent of regional inequality in the United Kingdom.
While parts of the United Kingdom are among the richest regions in Europe, the poorest parts of the United Kingdom are now poorer than the poorest parts of countries like Slovenia and Malta. UK regional income growth has been among the slowest in Europe, whilst real incomes in the majority of European regions have grown at a faster rate than those in UK.
Furthermore, the analysis shows how the UK now has some of the least generous welfare across OECD countries, with the value of welfare payments not covering the cost of essentials. It has done so only in two out of the last 14 years, during the pandemic, thanks to the £20 per week uplift to Universal Credit.
