The Resolution Foundation has calculated a new measure of "real living standards" that takes into account both disposable income and the "in-kind" benefits of public services.
It found the worst-off 10% of people of working age could see a 2% decline in their disposable income, but that would be offset by improvements in public services where they would be £28 better off overall.
For the top half of earners, there was likely to be a 0.4%, or £140, fall in living standards over the year once public service improvements were taken into account.
Mike Brewer, the interim chief executive of the Resolution Foundation, said the "budget tax-rise gamble" was that "while people may not be better off in purely financial terms, they will feel better off if we can have better, less dysfunctional public services".
The poorest households are hit hard by rising housing costs and increases in council tax, while also being affected by real-terms cuts to social security payments. The richest households do not rely on public services as much, and benefit less from rises in minimum wages. Brewer said: "If we put a cash figure on the benefits in kind from public services, then the 0.6% real living standards fall for the richest 10th of households is equivalent to a cash hit of £356 per person next year.
This story is from the December 27, 2024 edition of The Guardian.
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This story is from the December 27, 2024 edition of The Guardian.
Start your 7-day Magzter GOLD free trial to access thousands of curated premium stories, and 9,000+ magazines and newspapers.
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