Over 4 million working households now struggling to afford a decent life, research finds

More than four million working households across the UK are not earning enough to afford a “decent life”, according to new research.

The data, which covers the year before Labour's election victory, “lays bare the scale of the challenge facing the Government,” the Centre for Research in Social Policy at Loughborough University said.

It comes after prime minister Sir Keir Starmer said last month “helping British people with the cost of living is my top priority.”

The findings from the CRSP, and funded by the Joseph Rowntree Foundation (JRF), highlight the stark economic reality facing millions of families.

The study revealed that 4.2 million working households were living below the minimum income standard (MIS) in 2023/24. This figure represents over two-thirds (68.5 per cent) of all households falling short of the standard, a significant rise from just over half in 2008/09.

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Researchers define MIS as the income required for different household types to meet their basic needs and actively participate in society. The figure was calculated at £30,500 annually for a single person in 2025, and approximately £74,000 for a couple with two children.

Overall, 25.3 million individuals – encompassing children, working-age adults, and pensioners – were part of households below the MIS in 2023/24, a substantial increase from 16.5 million in 2008/09.

Those living below this threshold often struggle to heat their homes, enjoy family days out, or save for the future, researchers warned.

Peter Matejic, JRF chief analyst, said: “Nearly four in 10 of the population of the sixth richest country in the world can’t afford to live a decent life. It’s simply not right that millions of people don’t earn enough to afford a publicly agreed standard of living.

“Not earning enough has a ruinous effect on people’s productivity at work, their mental health and their relationships with family and friends. Worrying about affording the basics means people can’t spend time on the things that make them and our economy grow.”

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Elaine Robinson, lead report author from the CRSP, said: “Our analysis shows that increasingly, work does not give people what they need for a decent standard of living – over two-thirds of working-age households living on an inadequate income have someone in work.

“Wages have failed to keep pace with the cost of living, and rapid rises in the cost of necessities such as food, energy bills, transport and childcare have hit low-income families particularly hard.

“This report lays bare the scale of the challenge facing the Government. Improvements in workers’ rights are welcome, but these do little to ensure that work provides what households need to cover the basics, let alone to feel part of the society they live in.”

The report comes after estimates by the Resolution Foundation last week that 55 per cent of households living in poverty now contain at least one working person, rising from 38 per cent in the mid-90s.