It’s hard to believe that we’re almost coming up to a decade since the ‘Great Recession’ that began in December 2007. And although our economy went on to avoid a double dip recession, in the five years that followed, is it fair to say the knock-on effect of the financial crisis is still being felt across the country?
A recent national study led by the Institute for Fiscal Studies suggests that is very much the case, and has even predicted that the average household income in the UK is unlikely to grow for the next two years.
Looking further ahead, the report also suggests that in five years’ time households will only be 4% better off than they are now – which, if true, will mean that UK families face the tightest average income squeeze in 60 years, since World War II.
For the average UK household, the risk of financial struggles in the future is not something to put aside until that prospect becomes reality. Chances are, families may find they are up to £5,000 worse off per year than they might expect.
That means forward planning to ensure that any fall in real income doesn’t come as a surprise. Whether means putting a bit of extra cash away now, or preparing to cut down on spending in the next few years – it’s likely to pay dividends in the long run.