Chart showing Annual real growth in median equivalised household disposable income after housing costs, by non-pensioner income vigintile: UK
Changes to benefits and projected wage growth mean 2026-27 could see progressive income growth.
But this week’s dramatic swings in energy prices loom large over the near-term living standards forecast...
Today’s labour market statistics show that the UK’s unemployment problem is growing, with youth unemployment at its highest rate in over a decade. Here’s our @resolutionfoundation.org thread, from me and @louisemurphy.bsky.social :
Mike Brewer, Deputy Chief Executive of the Resolution Foundation, said: “Britain is getting older and sicker, while a greater share of its population has a disability. While these trends affect the whole of society, they are starkest in the poorest half of working-age families across the country. “But while we talk a lot about the effects of ageing and ill-health, the implications on demand for unpaid care is largely absent from political debate. That’s despite Britain having an ‘unsung army’ of one million people who do at least 35 hours of unpaid care work every week – equivalent to a full-time job. “It is time to provide better support for these carers and their families, just as we have done with working parents in recent decades. Carers deserve greater financial support in Universal Credit, more help to stay in work if they want to, and decent social care system to help the relieve the pressure on families.”
🚨 New
Britain’s ‘unsung’ army – a million people in poorer working-age households now have full-time unpaid caring responsibilities .
Unchanged wage growth + less inflation = stronger real wages.
The Bank projects more than twice as much real pay growth in the next three years (3.5%) as the OBR does over the next five (1.6%). If the Bank is right, that's a much rosier outlook for living standards.
Research Training Programme 2026 12-week training programme February - April 2026 Westminster Applications are invited from Black, Asian and Minority Ethnic graduates Apply by: 08:59 am Friday 30 January 2026 Full details can be found on the Opportunities page of the Resolution Foundation website
Applications for our Research Training Programme 2026 are now open.
Black, Asian and Minority Ethnic graduates are invited to apply for a 12-week training programme based in our Westminster office and paid at the London Living Wage.
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Real average weekly earnings (regular pay), actual, pre-recession peak and pre-recession trend: GB
Taking a step back reveals an even bleaker picture. After accounting for inflation, average weekly wages are just £31 above their pre-financial crisis peak – a massive £281 below where they would have been if wages had continued to grow at their pre-crisis rate.
Real average weekly earnings (regular pay): GB
This is bad news for workers: weekly earnings rose by just just £4.98 in real terms over the 12 months to November 2025 – barely enough to cover the cost of a high-street meal-deal.
Annual growth in average weekly earnings (regular pay) and CPIH inflation: GB
Economy-wide nominal wage growth remained strong – at 4.5% in the year to November 2025. But with inflation still above the 2 per cent target, this means that regular wages have grown by just 0.6% in real-terms in the 3-months to November compared to last year.
Growth in nominal private sector average weekly earnings, change since a year earlier and annualised change compared to three months earlier: GB
On pay, there's some evidence that wage growth may gradually be picking up the pace. Annual growth in private sector nominal wages continued to fall – but looking at a shorter-term measure (the annualised 3-month change), private sector pay growth ticked up to 3% between Jun-Aug and Sep-Nov 2025.
Vacancy rate, by industry: UK
On the slightly more positive side, however, vacancies have stopped falling - which, together with the fact that the unemployment rate is essentially unchanged on the previous month, suggests that unemployment could have peaked for the time being, albeit at too high a level.
Change in the 16-64 employment rate compared to January 2020, and contributions from participation and unemployment: UK
And it’s worth remembering that all of the fall in employment relative to pre-Covid has been driven by unemployment, not inactivity – the UK lacks jobs, not just jobseekers. See our Q4 2025 Labour Market Outlook for more: www.resolutionfoundation.org/publications...
Employment rate, unemployment rate, and inactivity rate, LFS and RF estimates: UK
This means that the 16-64 employment rate we calculate based on admin data and population estimates is now at 75.3%, down from a high point of 76.6% in 2023. The unemployment rate remained at 5.1%, not far off its Covid peak of 5.3% and otherwise the highest in almost a decade.
Number of paid employees according to real-time PAYE data: UK
This month we saw another fall in payrolled employment. The number of employees fell by 33,000 in November and a further 43,000 in December according to HMRC PAYE data (though the latter is likely to be revised) and is down by 184,000 on the year.
Today’s labour market stats show a weakening in employment, but with a glimmer of hope that pay growth may be picking up the pace. Our @resolutionfoundation.org thread from me and @charliemccurdy.bsky.social:
Adult social care is a vital public service, despite the mediocre pay and job conditions on offer to England’s 1.5 million social care workers.
The creation of the Adult Social Care Negotiating Body is a welcome step forward.
Here's how the Government can make a success ⤵️
Chart showing real average weekly earnings (regular pay), actual, pre-recession peak and pre-recession trend: GB
When we take a longer view, the picture is not much brighter. Average weekly wages are just £30 above their pre-financial crisis peak in real terms – and a whopping £280 below where they would be if wages had kept growing at their pre-crisis rate.
Chart showing real average weekly earnings (regular pay): GB
What does this mean for workers? Over the past 12 months, average weekly wages have grown by just £3.80 a week in real terms – barely enough to cover the cost of a cup of coffee from most high street chains...
Chart showing annual growth in average weekly earnings (regular pay) and CPIH inflation: GB
Across the economy as a whole, nominal wages grew by 4.6% in the year to October 2025. But with inflation still well above the Bank of England's 2% target, this means that wages are barely growing in real terms. Real wage growth was just 0.5% over the past year.
Chart showing growth in nominal private sector average weekly earnings, change since a year earlier and annualised change compared to three months earlier: GB
Turning to pay, and we see more evidence of a weakening labour market. Private sector nominal wages have grown by 3.9% over the past year – but when we look at a shorter-term measure (the annualised three-month change), private sector pay growth is just 2.7%.
Chart showing change in the 16-64 employment rate compared to January 2020, and contributions from participation and unemployment: UK
In fact, all of the employment fall since 2019 has been driven by unemployment, not inactivity. This is because the rise in health-related inactivity has been offset by falls in other forms of inactivity. Read more in our latest Labour Market Outlook: www.resolutionfoundation.org/publications...
Chart showing employment rate, unemployment rate, and inactivity rate, LFS and RF estimates: UK
The recent falls in employment have been driven by rising unemployment – which is now at 5.1%, not far off its pandemic-era peak of 5.3%, and its highest rate outside the pandemic since early 2016.
Chart showing 16-64 employment rate: UK
This means that the 16-64 employment rate we calculate based on admin data and population estimates has fallen to 75.3%, down from a high of 76.6% in 2023. (We’ve updated the population side of this to reflect the latest migration outturn data, and we’ll continue to refine it over the coming months)
Chart showing number of paid employees according to real-time PAYE data: UK
This month we saw another fall in payrolled employment. The number of employees fell by 22,000 in October and a further 38,000 in November according to HMRC PAYE data (though the latter is likely to be revised) and is down by 171,000 on the year.
Today’s labour market stats show a weakening jobs market, with rising unemployment and flatlining real pay. Some @resolutionfoundation.org key takeaways from me and @louisemurphy.bsky.social 🧵 ...
Have written a piece teeing up tomorrow's labour market stats, pointing out the sort-of obvious - that we currently have a problem with unemployment (i.e. demand) not just participation (i.e. supply). www.resolutionfoundation.org/publications...
Care workers are increasingly unhappy with their pay, despite the significant lifting of the wage floor in recent years.
@charliemccurdy.bsky.social breaks down why that might be the case ⤵️
Event advert for 'Taking Better Care of Our Workers'' The Resolution Foundation is hosting an in-person event and interactive webinar to debate and discuss the key policy questions the Government needs to resolve to ensure the success of the Adult Social Care Negotiating Body and Fair Pay Agreement. The event will be open for people to attend in person, alongside being broadcast via YouTube and the Resolution Foundation website. Viewers will be able to submit questions to the panel before and during the event via Slido. Sign up at the link.
Adult social care is a vital public service. But this is not reflected in the pay and job quality on offer for England’s 1.5 million social care workers.
Join us on Thursday to discuss how a Fair Pay Agreement could improve conditions for social care staff.
Register here ➡️ buff.ly/4PVIAzP
The 2026 minimum wage rates have been announced:
NLW: £12.21➡️£12.71. (+4.1%)
18-20-yo rate: £10➡️£10.85. (+8.5%)
16-17-yo rate: £7.55➡️£8.00. (+6%)
Some context & thoughts on those uprating decisions:
Reputational levers like naming rounds should of course be accompanied by financial penalties - but they are a useful part of the enforcement toolkit, and it's welcome that the Government is trying to leverage them to greater effect. www.resolutionfoundation.org/publications...
Good to see this story over the weekend that the Government is doubling down on 'naming and shaming' employers who have been found to underpay the minimum wage. Our past research has shown that reputational concerns can help convince employers to play by the rules. www.thesun.co.uk/money/374030...
