The UK has been navigating unchartered waters in recent years. The fall in living standards experienced by families on low to middle incomes has been unparalleled in the post-war era. According to the Institute for Fiscal Studies, families on median incomes have experienced an unprecedented collapse in living standards. The coming years do not present much change in fortunes. Forecasts suggest that, even if robust growth returns after 2017, incomes for the low- to middle-income group in the UK will be no higher in 2020 than they were in 2007. With growth assumptions having to be revised downwards on a regular basis and the future of the eurozone still very uncertain, even this level of improvement may be optimistic.

It is clear that the trends facing low- to middle-income families in the UK have been longer lasting in the US. While ordinary workers did benefit from certain periods of growth in the US, notably, in the mid- to late 1990s, as Lane Kenworthy highlights in Chapter 1.2, overall their earnings have been flat since the late 1970s.

If the forecasts are gloomy, the impact of falling living standards on British people's lives has been difficult for some. For those on middle incomes, this new economic landscape has come as a surprise. Aspirations such as home-ownership that were expected by their parents are increasingly the preserve of the better off. Forecasts indicate that if the economic recovery is weak, 27% of low- to middle-income families with children could be renting privately in England by 2025 and as many as 35% in London, with mortgaged home-ownership falling significantly. Reasonable rewards, like the ability to go on short holidays, now seem a struggle. Meanwhile, for many on lower incomes, day-to-day life has become a struggle. Increases in the cost of living continue to outpace wages, families are feeling the weight of debt repayments and austerity has led to major cuts in government support for tax credits and services. Among those hardest hit, families are turning to food banks, pawn shops and subprime lending to get by – features of life more traditionally associated with poverty and being out of work.