The COVID-19 crisis hit after the weakest decade of growth in incomes since comparable records began. Years of stalled productivity and poor earnings growth, and deep cuts to working-age benefits had been a further drag on the living standards of many lower-income households.
Lower income households are twice as likely as high income households to have increased their use of consumer credit during the crisis, and are 50 per cent more likely to be saving less than usual.
The fall in living standards has been driven by the freeze in the value of working-age benefits and other cuts, such as the two-child limit, slowly taking effect.