Pressure On Pay, Prices And Properties - How Families Were Faring In October 2023

17th December 2023

Two years into the cost of living crisis, inflation has finally turned a corner. The headline rate of CPI inflation has fallen from its October 2022 peak of 11.1 per cent to 4.6 per cent in October 2023, and the Prime Minister has been able to say that his target of halving inflation in 2023 was met. But politicians and central bankers saying that this means the problem is over risk sounding out of touch with the public experience.

In this report, we draw on a new YouGov survey of over 8,000 adults aged 18 and above that was in the field in October 2023 - following on from similar surveys in March 2023 and November 2022, and supported by the Health Foundation - to take stock of people's experience of the ongoing cost of living crisis. We find that, although there have been slight improvements in some outcomes over the past year, most indicators of how families are faring remain at levels that are far more concerning than was the case two or more years ago.

Focusing on people's experiences of pay and price rises, we also find that it is important to examine the variation in people's experiences to fully understand the pressure that people are under. Although average earnings are growing quickly right now, people who have not received a pay rise at all will be far less able to cope with rising prices than the average worker. Similarly, someone who has renewed their mortgage in recent months and seen their repayments double, or who has had to sign a new tenancy agreement, will have faced a bigger increase in their outgoings than those who own their home outright, or whose mortgage or rent is fixed. It is people with higher housing costs than a year ago but no increase in pay who look most vulnerable as the cost of living crisis continues.

Although there have been slight improvements in some outcomes since November 2022, most indicators of how families are faring remain at levels that are far more concerning than was the case two or more years ago. For example, over a fifth of people were in moderate or severe food insecurity in October 2023, almost three times as many as pre-pandemic levels (22 per cent versus 8 per cent).

The impacts of the cost of living crisis are worse for certain groups, and our survey consistently finds that outcomes are worse for people with disabilities compared to those without, and for those from Black ethnic groups compared to those from a White ethnic group.

Over the year to October 2023, our employed working-age survey respondents were more than twice as likely to report that their pay had gone up than to say it had stayed the same or fallen (48 per cent versus 23 per cent). But almost a quarter (24 per cent) of pay rises in the year to October 2023 did not keep pace with inflation - and a quarter of workers did not see their pay go up between October 2022 and October 2023, including 7 per cent whose pay actually fell.

Over two-in-five working-age adults (42 per cent) experienced a rise in their housing costs (excluding those without responsibility for paying housing costs), 12 percentage points more than in 2018-2019 (30 per cent), and indeed more than at any point in the past decade. There are bigger differences by age, because older age groups are far more likely to own their home outright: around two-fifths of working-age adults under 55 had seen their housing costs go up, compared to just a quarter (25 per cent) of 55-64-year-olds.
Overall, we estimate that around 7.4 million working-age adults have experienced a housing cost rise over the year to October 2023, but more working-age adults - at least 13.7 million - got a pay rise. But, of course, these need not match each other in size: the typical housing cost rise among those whose housing costs rose was far higher than the typical pay rise among that same group, at 13 per cent and 5 per cent respectively.

About one in seven (14 per cent) working-age respondents saw both pay and housing costs increase, but there was a roughly similar number (14 per cent) saying that their housing costs rose but without their pay increasing, either because their employer did not offer a pay rise or they were not in work.

Read the full report HERE
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