Zarah ChoudharyAccording to research published by the Resolution Foundation, Britain’s low-to-middle income families are far more likely to be employed in recent years than they were 30 years ago.
This was despite facing significant challenges, including rising disability rates, more caregiving responsibilities, and demographic shifts.
The share of workless households in this income group almost halved since the mid-1990s, dropping from 24% in 1996-97 to 13% in 2022-23.
Employment rates among mothers in low-to-middle income families increased most sharply – from 46% in 1996-97 to 58% by 2022-23.
Unsung Britain – the launch paper for a 12-month project, with support from JPMorgan Chase – examined how the economic circumstances of the 13 million working-age families in the bottom half of the income distribution have changed since the mid-1990s.
Research showed that low-to-middle income working-age families were, on average, older compared to 30 years ago, and even more so than society as a whole.
Lower-income families were almost as likely to be in their 50s as in their 20s (20% and 21% respectively) – a shift from the mid-1990s, when people in this group were around 60% more likely to be in their 20s.
Three in 10 (30%) working-age adults in low-to-middle income families said they had a disability in 2022-23, up from 19% in the mid-1990s.
More lower-income families were caring for adults as a result.
One in eight (12%) people in a low-to-middle income family cared for an ill, disabled or elderly adult, a trend that had risen over time, although changes in data sources prevented direct comparisons.
Lower-income families were significantly more likely to have adult caring responsibilities than higher-income families (12% versus 8%).
The Foundation noted that the combination of demographic, health, and cultural trends meant that people in low-to-middle income families were now over three-times more likely to be economically inactive due to ill-health (13%) than because they were looking after children (4%).
This was a significant change from 1994-95, when the rates were the same (11%).
The fall in home-ownership in this group – declining from a peak of 40% in 2000-01 to around 30% in 2022-23 – coupled with a lack of social housing, pushed a record share of poorer families into the high-cost private rented sector.
Between 1994-95 and 2004-05, the typical non-pensioner low-to-middle income real household disposable income grew by almost 50%.
But in the two decades since the mid-2000s, growth tailed off – incomes grew by just 10% for the typical low-to-middle income family, and by just 7% for the tenth percentile of the income distribution.
Mike Brewer, interim chief executive of the Resolution Foundation, said: “The 13 million low-to-middle income families across Britain today are older and sicker than a generation ago.
“But, although these trends have come to the fore in recent years as long-term sickness has hit record levels, a longer-term view shows that worklessness is a far smaller problem than it used to be.
“That’s mainly due to the major strides Britain has taken in terms of parental employment.
“As low-to-middle income Britain has changed, so too have the policy challenges they face.
“We should learn the lessons of how a new policy settlement has boosted parental employment over time, as we look to new challenges like ill-health and disability.
“We also need to focus more on problems like the high-cost, low-security rented properties that so many more families live in.
“Lower-income families got 50 per cent richer over the decade that straddled the millennium. But their incomes have grown by just 10 per cent in the two decades since the mid-2000s.
“This highlights the scale of the challenges confronting the new Government as it seeks to deliver broad-based improvements to families’ living standards.”
