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Resolution Foundation

@resolutionfoundation.org

The Resolution Foundation is an independent think-tank dedicated to lifting living standards in the UK.

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Resolution Foundation @resolutionfoundation.org · 1h ago

The three steps needed for John Healey to climb out of the UK's fiscal hole ⤵️ buff.ly/kPBRGe7

To climb out of a hole, you have to first understand its shape. The hole in the UK’s public finances is deep – public debt has nearly tripled since the financial crisis. Low growth, as well as being disastrous for living standards, is a key driver. But our ageing and ailing population also plays a huge role in our fiscal woes. Even if you stop digging, the hole will keep getting bigger. But while climbing out will be long and hard, it isn’t impossible. Resolution Foundation research published today sets out how to avoid the explosive debt path forecast by the OBR.

Let’s focus on what that means for you, in this Parliament.

Resolution Foundation @resolutionfoundation.org · 2h ago

How is Gen Z doing on pay? Despite recent economic stagnation, there has been some genuine pay progress for those in their 20s. For the lowest-paid young people in particular, this increase has been driven by a rising minimum wage. More👇️ buff.ly/f0r83D1

Resolution Foundation @resolutionfoundation.org · 3h ago

How do we incentivise firms to take on more young people? Some believe the problem lies with the convergence between youth and adult minimum wages, while others think we should scrap employer NICs. But we see far greater promise in expanding existing government schemes. More⬇️ buff.ly/tDv85WG

Resolution Foundation @resolutionfoundation.org · 4h ago

Pensioner incomes had caught up with non-pensioner incomes by the time the triple lock was introduced. The triple lock, then, can take no credit for the dramatic fall in pensioner poverty in the 2000s. Read more in our latest spotlight➡️ buff.ly/FY93tV6

When the first Pensions Commission was in place, the typical pensioner had a lower income than the typical non-pensioner, but that has not been the case since 2011-12, as Figure 1 shows. And pensioners are now less likely to be in poverty than the rest of the population, and half as likely as children.

Resolution Foundation @resolutionfoundation.org · 5h ago

As reported in today's Times, the UK’s public financial institutions can help Andy Burnham's Government to unlock billions for investment. buff.ly/bErADgl

Treasury seeks to kick-start economy with £9bn-a-year borrowing bonanza

Ministers hope to exploit a change in the fiscal rules to spend billions more a year on housing, infrastructure and British start-ups

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Resolution Foundation @resolutionfoundation.org · 6h ago

Income gaps between places in the UK are large and stubborn. Our latest slide pack features the good, bad, and ugly, of UK regional inequality👇 buff.ly/I7DTRZo

Resolution Foundation @resolutionfoundation.org · 7h ago

For young people to land a job out of school, college or university, employers need to be willing to take them on. How can we best incentivise employers to hire young people? Check out our new report⤵️ buff.ly/jnl4E9P

Chart showing proportion of employers that have taken on someone for their first job after leaving school, college or university in the previous two to three years: UK nations

Resolution Foundation @resolutionfoundation.org · 8h ago

Trimming the VAT? Jonny Marshall takes a look at the government VAT cut to energy on our substack. This policy should only be the start. Ministers need to plan for the worst by designing and delivering a targeted, responsive system this winter. ⤵️ buff.ly/QAdtMbt

Distribution of government spending by household income quintile under two GB policies: Electricity VAT cut gives rising shares from poorest to richest (16%, 18%, 20%, 22%, 25%), while Targeted discounts concentrate benefits in the poorest quintiles (41%, 33%, 20%, 6%, small remainder).

Resolution Foundation @resolutionfoundation.org · 9h ago

The arrival of a new PM with investment ambitions has reignited interest in how this can be done without increasing taxes or breaking the fiscal rules. Public Financial Institutions (PuFins) should be part of the answer here Four PuFins have a £200 billion wingspan 👇 buff.ly/0HdNNd2

Financial capacity of the National Wealth Fund, British Business Bank, National Housing Bank, and UK Export Finance, by Parliament and finance type: UK

Resolution Foundation @resolutionfoundation.org · yesterday

A decade after the Brexit vote, the UK has lost its trading edge in goods faster and more broadly than any G7 peer. How can we boost goods exports and regain our trading edge?

explainer graphic 1

1. goods decline
In the years since the UK formally left the EU, the UK’s transition towards a services-dominated economy has accelerated and services now account for 59 per cent of all exports – up 11 percentage points since 2019.

This is not due to a boom in services, but a deterioration across goods exports. Between 2019 and 2024, the UK’s share of global goods exports fell by around a fifth – a shortfall of roughly £74 billion.

explainer graphic 2

2. poor performance

The scale of the UK’s deterioration compared to other advanced economies is uniquely bad and has been driven by Brexit rather than other recent shocks.
This goods weakness stands out internationally: the UK has slipped from the world’s 11th largest goods exporter to 14th.

3. losing ground

Almost half (49 per cent) of the UK’s recent poor performance in goods exports have taken place across the eight key sectors identified as priorities in the Government’s industrial strategy.

The losses of export competitiveness in sectors like cars and pharmaceuticals is especially worrying given the UK’s historic strengths in these areas.

explainer graphic 4

4. addressing barriers

Britain needs to revamp its industrial strategy and sharpen its trade game by leveraging the strengths of its powerhouse services exports and focus on a small number of critical, high-value good sectors. For sectors like chemicals and cars this should mean far deeper dynamic alignment with the EU.

The Government should also look at where and why the UK’s export position has weakened since Brexit and use its trade strategy to address these barriers.

Resolution Foundation @resolutionfoundation.org · yesterday

Was cutting VAT on electricity the right call? The highest-earning tenth of families spend nearly twice as much as the lowest-earning tenth on electricity. Since better-off households tend to use more electricity, they pocket more of the cash saving⬇️ buff.ly/QAdtMbt

Chart showing proportion of total domestic electricity consumption by each after housing costs income decile: GB 2024-25

Resolution Foundation @resolutionfoundation.org · yesterday

Andy Burnham wants to deliver the biggest programme of council housebuilding since the post-war era. What are his options? Looking at the Social and Affordable Homes programme, there are trade-offs between how many homes you can build and how affordable they are. Read more ➡️ buff.ly/O1OKDnN

Our new Housing Outlook looks at what it might take to deliver more homes let at a social rent, commonly known as council houses. On paper, the new Social and Affordable Homes programme looks like the vehicle to deliver this: a £39 billion envelope targeting 300,000 affordable homes with a full 60 per cent earmarked for social rent. So why not go the full hog and ring-fence every last pound for social rent? Because bricks don’t care about tenure, but the Treasury does. A home costs the same to build whoever ends up renting it, but social rent brings in less rental income over its lifetime than other affordable products, so it needs a bigger dollop of grant up front to stack up for a housing association. Hold the money fixed and chase 100 per cent social rent, and you build 50,000 fewer homes overall; hold the homes fixed, and you’re reaching for £8 billion more in grant.

Resolution Foundation @resolutionfoundation.org · yesterday

Surely we can only tackle the NEET rate with brand new policy solutions? Our research shows that expanding existing schemes - the Youth Jobs Grant and the Jobs Guarantee - could help an additional 37,000 young people into work. More👇 buff.ly/jnl4E9P

Resolution Foundation @resolutionfoundation.org · yesterday

The Employment Rights Act is the biggest overhaul of employment rights in a generation. But how do workers actually feel about their voice in shaping their pay and conditions? Check out our research on worker power in precarious sectors👇 buff.ly/v1vBYWZ

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Interview participant said "I phoned in sick one shift. Then two weeks after, there was an extra shift, I tried to pick it up.

My manager messaged me directly and said 'we found someone else to do it, you're too unreliable because you rang in sick'"

Resolution Foundation @resolutionfoundation.org · yesterday

Some good news on regional equality: employment gaps have shrunk. Over the 2010s, the gap between low-employment (10th percentile) and high-employment (90th percentile) areas shrank by 3 percentage points. More👇 buff.ly/I7DTRZo

Resolution Foundation @resolutionfoundation.org · yesterday

'we've ended up better parents than citizens' In our recent podcast discussion, David Willetts reflected on how opportunities for young people have become limited in wider society. Listen now buff.ly/YC754Cy

Resolution Foundation @resolutionfoundation.org · yesterday

What does current pay for social care workers in the UK look like? Figures suggest that in 2024, 21,300 care workers were paid less than the minimum wage, likely higher once we account for unpaid travel time. More in our report from December➡️ buff.ly/veEOJFN

chart showing that One-fifth of minimum wage social care workers are underpaid

Resolution Foundation @resolutionfoundation.org · 2d ago

The Burnham Government will need a new approach – and new money – to really ramp up affordable housebuilding. But even with the current spending envelope, there is scope to build more social rent homes and more affordable homes overall. Read more ⬇️ buff.ly/mvyhrC0

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Hannah Aldridge, Senior Research and Policy Analyst at the Resolution Foundation, said:

Andy Burnham has put boosting affordable housing centre-stage and with 134,000 families in temporary accommodation in England and 1.3 million on the housing waiting list, this ambition is welcome and necessary.

The government will need to strike a balance between affordability for tenants and building at scale. By making careful use of the Social and Affordable Homes Programme, private developer contributions and the National Housing Bank, the new Government can boost the supply of social rent housing and build more affordable housing overall.

But building takes time. Close to one million low-income renters already face a shortfall between their rent and housing support, and that gap will hit a record high this autumn. The new Prime Minister should commit to relinking housing support with local rent levels in the upcoming Budget.

Resolution Foundation @resolutionfoundation.org · 2d ago

Are Gen Z outpacing Millenials on pay? Our recent report takes a look at how Gen Z and Millenials' living standards are faring⤵️ buff.ly/k30vVVD

Graphic with text

1 Gen Z progress

Millennials – those born between the early 1980s and mid-1990s – are the first generation not to have enjoyed higher disposable incomes than previous generations.
But Gen Z doesn’t appear to be suffering from the same stalled progress. For 20-26-year-olds born in 1996-2000, incomes are up by £3,700 (15%) on those born a decade ago at the same age.

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2. stacked pay

Gen Z’s income gains have been driven by
strong rises in real hourly pay.
At age 24, those born in the early 2000s are earning more than any other age cohort going back to those born in the 1950s.

graphic with text

3 new concerns

But for a significant share of younger members of Gen Z, their careers have
not got off the ground at all.

There are now one million 16-24-year-olds
not in employment, education or training (NEET) – the first time the number of NEETs has reached six figures since 2012.
Without swi action, the NEETs crisis could turn into a long-term challenge for Gen Z.

graphic with text

4. NEET solutions

The Government has rightly made this a priority but needs to go further than the announced policies.

It should look at expanding mental health provision, providing a single system of engagement and support, boosting further education funding, and prioritising under 25-year-olds for apprenticeship funding.

Resolution Foundation @resolutionfoundation.org · 2d ago

Since the early 2000s, Section 106 agreements have become an increasingly important means of delivery of affordable homes. Between 2015-16 & 2024-25 private developers contributed 244,000 homes (45% of the 542,000 total). Read more on how Andy Burnham can boost affordable housing: buff.ly/mvyhrC0

Chart showing affordable home completions, by delivery mechanism: England

Resolution Foundation @resolutionfoundation.org · 2d ago

The VAT cut on electricity bills in October is not the most cost effective way to support vulnerable households this winter.

25% of the cash benefit of a VAT cut will flow to the richest fifth of families, compared to 16% for the poorest fifth.
Targeted energy discounts could see low and middle income families gain more than twice as much.

Resolution Foundation @resolutionfoundation.org · 2d ago

In the last year just 12,000 social rent homes were built in England, a fifth of the affordable total. This is much less than in the 1990s, an average of 42,000 social rent homes were built each year (79 per cent of the total). buff.ly/mvyhrC0

Chart showing affordable hime completions. by tenure: England

Resolution Foundation @resolutionfoundation.org · 2d ago

A sharp rise in the share of patients with multiple conditions has increased the complexity of cases for the NHS. See our recent report for more on the cost of growing ill-health and further diagnosis of Britain's fiscal funk👇 buff.ly/CemKeQi

Resolution Foundation @resolutionfoundation.org · 2d ago

The UK’s public financial institutions (PufFins) can unlock billions for investment, within the existing fiscal rules. Read 'Much ado about PufFins' here ⤵️ buff.ly/0HdNNd2

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Elliott Christensen, Senior Economist at the Resolution Foundation, said: “For too long the UK has been living off its past and not investing in its future. The result is creaking infrastructure across the country, which is holding back economic growth.

“The Starmer government took welcome steps to address this shortfall by changing the fiscal rules and expanding the balance sheets of Public Financial Institutions. The new Government should now ramp up their capacity, starting with a £16 billion boost to the National Wealth Fund. This will help the new Prime Minister in his mission to boost regional economic growth in all parts of the UK, while sticking to his predecessor’s fiscal rules.”

Resolution Foundation @resolutionfoundation.org · 2d ago

Are we seeing an increase in inequality within younger generations? In our recent podcast, Ruth Curtice reflects on how parental help with housing is unevenly spread. Listen here 👇️ buff.ly/YC754Cy

Simon Pittaway @simonpittaway.bsky.social · 5d ago

But sharper growth incentives need to be balanced with managing the risk of wider gaps between regions. Had mayors kept a share of Income Tax since 2010, that part of funding would have grown much more in London than anywhere else. That's much more regional variation than we've seen in practice.

Amber Younis-Wood @amberyouniswood.bsky.social · 5d ago

Autumn Budget 2026 has just been announced for 28 October so it’s time to get technical about living standards. The two main measures of household income, RHDI and HBAI, can tell very different stories. The new @resolutionfoundation.org spotlight I’ve just published explains why. 🧵⤵️

Simon Pittaway @simonpittaway.bsky.social · 5d ago

Today, the Government gave us the first real details of its plans for devolution. The headline measure is letting mayors keep a slice of Income Tax raised in their areas, in an effort to sharpen their incentives to grow. www.gov.uk/government/n...

PM hands mayors share of income tax to make lives better in every postcode

The Prime Minister will today launch the biggest transfer of power from Westminster in a generation, giving communities greater control over the decisions that shape jobs, transport, housing and publi...

gov.uk