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Britain is in the middle of a lost decade for income growth. It is why you feel that no matter how hard you work, how much overtime you do or how many pay rises you’ve managed to negotiate, the needle on your quality of life is stuck, refusing to move higher on the dial in front of you.
It is, to be blunt, why you cannot have nice things. And, perhaps, why politicians struggle to capture our attention, hold it and stick around long enough to improve the situation.
Coming up in this week’s newsletter:
- The income statistics which tell us that Britain is now in the midst of the worst decade for income growth since records began.
- Is the end of the small-time buy-to-let investor landlord nigh?
- And, finally, why you need to watch the BBC prison drama .
It’s official: this country is suffering the worst decade in terms of the growth in household incomes since records began. Leading Westminster think-tanks, such as the Institute for Fiscal Studies (IFS) and the Resolution Foundation, have warned that this situation is “catastrophic” and that a “painful” few years lie ahead.
How autism diagnoses are ‘increasingly linked to ADHD’
Experts found a rapid rise in autism diagnoses among 16-to 20-year-olds since 2010 in the UK, as well as a rise in women and white people, compared to other ethnicities.
What were the findings?
Researchers from the Medical Research Council looked at data from the UK and Sweden.
They found that new diagnoses have increased from six people per 100,000 in 2010, to 64 per 100,000 in 2023.
Analysis also showed there has been a change in the make-up of people diagnosed with autism, with a decrease in those with a prior diagnosis of epilepsy.
Instead, they found an increase in the proportion of people who had a prior diagnosis of ADHD, stress-related disorders, eating disorders, headaches and chronic fatigue.
The story in numbers
58%
The proportion of autism diagnoses in people with anxiety more than doubled form 29 per cent to 58 per cent between 2010 and 2023.
- In the UK, 24.5 million adults contributed to the study, including 141,119 with an autism diagnosis.
- Writing in , the team said this could be the result of “greater appreciation of nuanced forms of autism that may have previously been labelled as other conditions due to overlapping features, particularly in females”.
How menopause is affecting women’s careers and pensions
Half of women in the perimenopause or menopause say their career has suffered as a result, with workers cutting their hours or feeling forced to turn down opportunities for career progression, according to a new survey.
Lack of support for symptoms
Nearly one in three said their life stage had influenced their retirement savings, according to the research for Scottish Widows. A similar number also said their regular finances had been affected.
And 50 per cent of women surveyed said they would like more support at work. 17 per cent said they had been forced to take time away to manage symptoms.
Breaking down the numbers
- One in eight (13 per cent) women had reduced their working hours and 10 per cent had turned down a promotion or career progression opportunity, for menopause-related reasons.
Scottish Widows found that a 50-year-old woman in full-time work taking a six-month unpaid break could potentially cost £1,300 in pension contributions.
Gaps in pension contributions will have a bigger impact over time, as savers will also miss out on the interest that could have been earned on them.
Two-thirds of women surveyed believe employers should be required to provide better support to women experiencing menopause symptoms, including financial support.
A blow to pension pots
Perimenopause or often coincides with what should be the peak earnings potential of a woman’s career. When symptoms force women to reduce their hours, step back from promotion opportunities or leave work entirely, the ripple effect on their pension pots is huge
Susan Hope, a retirement expert at Scottish Widows
The lessons Britain can learn from France’s pensions crisis
The i Paper takes a look at why the bill for pensions keeps rising on both sides of the Channel – and what can be done about it.
What’s the situation in France?
France will be unable to resolve its debt crisis without tackling sky-high pension bills, economists have warned.
It spends a massive 14 per cent of its GDP on pensions and the costs are rising every day.
Falling birth rates and rising life expectancy in France and the UK means pensions are mounting pressure on public finances.
3 min read
Why pension burdens are becoming unsustainable
- Economists have warned that unless France takes action to overhaul the pension system, it is unlikely to end its debt crisis.
- In the UK, public spending will be further strained next year, as state pensions are set to get a 3.5 per cent boost.
- Fraser Thorne, CEO of Edison, told The i Paper: “The UK’s… trajectory is more manageable. But more manageable isn’t the same as sustainable.”
UK advantages over France
Heidi Karjalainen, senior research economist at the Institute for Fiscal Studies, says bigger private pension pots in the UK are making it easier to increase the state pension age, whereas “in France, it’s been really difficult to do that”.
It’s this cushion that will help the UK better navigate the trials and tribulations that come with an ageing population and falling birth rates, she says.
Giving people time to adjust
The French proposals were announced “without much notice”, Karjalainen noted, while the UK made the decision more than a decade ago.
Thorne says France offers a “pointed lesson in what can happen when governments try to reset the terms of the pension contract: five prime ministers in two years; mass street protests; and a reform ultimately diluted by political reality even when the economics were clear”.
3 min read
2 min read
Virgin Media O2 cutting thousands of jobs to save costs
Up to 4,000 jobs could be affected as the flailing company attempts to slash outgoings in a bid to save £800m by 2029.
What you need to know
- Virgin Media O2 has built up £22bn in debt.
- CEO Lutz Schüler said in the light of its financial struggles, “doing what we’ve always done is not an option”.
- Currently employing 15,000 people, could cut as many as 4,000 jobs, an inside source told .
- The aim is to reduce the company’s wage bill by 30 per cent.
2 min read
What will this mean for customers?
The majority of job losses will be in non customer-facing roles, the company suggested.
Virgin Media O2 has also decided to scrap planned upgrades, including its fibre broadband rollout, to try to reduce costs even further.
Prospect, one of the unions which represents staff, billed the upcoming redundancies as “disappointing and very unsettling”.
Major study into ‘forever chemicals’ in our bodies launched
The UK Health Security Agency (UKHSA) has set out to understand more about the health impacts of PFAS, known as forever chemicals.
How will it work?
Dr Edward Wynne-Evans, a director at the UKHSA, told BBC Radio 4 he hopes the study will reveal “what different levels of exposure mean for an individual’s long-term health”.
What are the impacts of PFAS?
They do not break down in the environment and two types have already been banned for cancer risks.
For these, PFOA and PFOS, known risks also include raised cholesterol, lower antibodies and impacts on the thyroid.
This summer, blood testing in the Lancashire town of Thornton -Cleveleys, near a major chemical factory, found elevated PFOA levels.
3 min read
The help available for first-time buyers, rated
The Government’s Your First Home scheme won’t launch until the spring but others are currently available.
Here is what might work best for you.
The scheme will see first-time buyers buy a new-build property with a small deposit, backed by a 20 per cent equity loan.
Housing developers will contribute to fund the scheme, which will have an earnings cap.
Experts warn that such a small deposit could mean buyers will have limited savings.
2 min read
Lifetime and first-time buyer ISA
The Lifetime ISA allows people to receive a 25 per cent bonus on their savings up to £1,000 per tax year.
The Government also confirmed first-time buyers will have access to a new savings product called the first-time buyer ISA from April 2029.
It will replace the existing LISA for new savers and will allow them to save up to £4,000 a year with a 25 per cent government bonus that will be paid upon withdrawal towards a home worth £450,000, with the maximum value of the bonus capped at £20,000.
3 min read
Other options on offer
- Shared ownership: Purchase a share of the property’s value, and then pay the rest in rent, as well as a monthly service charge and ground rent.
- Low-deposit schemes offered by developers: Many developers offer help towards people’s deposits. But experts warned buyers should not be tempted to stretch for a bigger home than they can afford.
3 min read
Due to cost of living pressures and a lack of substantial wage growth to tackle them, the latter group think that a typical working-age household will see their disposable income fall by £1,050 or 3 per cent between now and 2029.
Slow growth, inflation and stubbornly high housing costs are the main culprits. But it wasn’t supposed to be like this. Indeed, it wasn’t always like this. As this chart shows, while disposable incomes fluctuated throughout the 1970s and 80s, they generally rose again after a fall. Not so since the 2008 global financial crisis, Brexit and the pandemic.
In previous decades, you could expect to end up thousands of pounds better off. Now, we will be lucky to end the 2020s a few hundred quid better off.
For younger adults in particular, as I wrote in my column, this problem is particularly dire. If you are unlucky enough to have been born in the 1980s or 90s and find yourself trying to build wealth, buy a house or start a family at this particular moment in modern history, you’re swimming against an increasingly strong tide.
The average house price in the UK is currently around 6.5 times the average income, compared to around 3.5 times in 1996 and 2.5 times in 1966.
And, yet, there is little political urgency aimed at this issue. One could argue that it is why Andy Burnham – and now former chancellor Rachel Reeves – think Britain should rejoin the European Union and why we’ve heard so much about growth – now rebranded as “good growth” – in recent years.
Flip the rhetorical coin and, equally, others will say it’s why we left the European Union in the first place and why there has been so much talk about cutting immigration (which, as I’ve written, is now so low as to pose its own growth risk).
But, beyond that, nobody in power, or close to it, seems to want to address this issue head-on.
Last week, Chancellor John Healey delivered what was widely-interpreted as being a very safe and sober budget in the House of Commons. No surprises, no bells or whistles, just kicking a can full of difficult spending decisions – like benefits changes, student loan repayments and the cut to the triple lock on the state pension – down the road until 2030.
The Resolution Foundation have warned that measures in the Budget to tackle the cost of living – such as giving people £100 off their energy bills – did “not live up to the scale of the challenges that Britain faces”.
What Healey did not say last week is that he, even though we are in a “lost decade” for income growth, like Reeves before him and Hunt before her, will keep tax thresholds frozen until at least 2030. This means that even as people’s pay goes up, the amount at which they tip into the higher rate tax band of 40 per cent does not. So, effectively, their pay bump means less than it would, could or should.
You are now dragged into paying the higher tax rate of 40 per cent if you earn £50,271 or more. You stay in that bracket until you earn £125,000, but at you lose your personal tax-free allowance and your entitlement to state-funded free childcare.
This tax rate used to be for some of the richest people in our society. But because of wage increases in recent years, as employers give their inflation-hit workers pay rises, the number of people earning over £50,000 has roughly doubled over the last decade, up from about 3.5 million to around seven million.
Analysis from the IFS has shown that by 2027-28, the number of people paying the higher rate of income tax will reach 7.8 million, or a fifth of all taxpayers.
That includes around one in eight nurses, and one in four teachers. In contrast, in the 1990s, virtually no nurses and only one in eight teachers paid the higher rate of tax.
If Britain is now a country where nurses and teachers pay the highest rate of tax, once paid by bankers and top solicitors, even though they may be struggling to buy houses or afford to have children, then our ideas about class and what it’s possible to achieve are warping almost as fast as our living standards.
Have you recently had a pay rise that didn’t go very far? Let me know vicky.spratt@theipaper.com
Housing crisis watch
Are we witnessing the end of the small-time buy-to-let landlord? I think so, as I’ve written here. And, if you think Labour allowed this to happen by accident, you’ve not been paying attention.
Vicky’s pick
I’ve been watching a series written by Jimmy McGovern called , which looks at Britain’s prison system. It was heartbreaking and shocking. I asked my partner, who works closely with the prison sector, whether some of the horrors depicted were accurate – young people being locked up all day in tiny cells in a young offender’s institute with little time outside or for exercise – he said… yes.