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Resolution Foundation @resfoundation.bsky.social · 9h

Scrapping the two-child limit on benefits would be the most targeted and cost-effective way for the Government to meet its aim of reducing child poverty.

1. Thinking big
Ending the two-child limit on benefits would lift 470,000 children out of poverty by the end of the decade.
Abolishing the policy would cost £3.5 billion annually by the end of the decade, and it remains the most targeted and cost-effective way of meeting the Government's aim to reduce child poverty.

2. Spending wisely
While ending the two-child limit is not the only policy option available for reducing child poverty. it remains the best value option, in terms of £s spent per child lifted out of poverty

3. Funding appropriately
The money needed to fund the scrapping of the policy could be raised by a new Sugar and Salt Reformulation Tax, as recommended by the National Food Strategy.

This would have health benefits for the country, relieving long-term pressure on the NHS, while also funding a reduction in child poverty.

4. There's no time to waste
As things stand, child poverty is on track to reach a record high of 4.8 million children by the end of this Parliament.
The Government must act now if they hope to preven a generation of children from growing up in poverty.

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Resolution Foundation @resfoundation.bsky.social · 13h

The value of Fuel Duty is now at historic lows, having fallen by 23p per litre (or a third) in real terms over the past decade.

It would cost £5 billion *per year* to continue the freeze by the end of the decade.

Instead, smaller quarterly increases should be introduced.

Chart showing Nominal main rate of Fuel Duty per litre under different scenarios

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Resolution Foundation @resfoundation.bsky.social · 1d

A typical worker would now need to save more than a lifetime’s worth of their earnings to become wealthy

It would now take 52 years of typical earnings – £1.3 million in total – to move from the middle to the top of the wealth distribution.

➡️ buff.ly/Ya8kInK

Chart showing ratio of the absolute wealth gap between fifth and top wealth deciles (measured by average family wealth per adult) to median full-time earnings: UK/GB

In 2006-08, the gap in average wealth per adult between the top and middle deciles was equivalent to around 38 times typical fulltime earnings. By 2020-22, this had risen to 52 times

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Resolution Foundation @resfoundation.bsky.social · 1d

"The tax system gets worse and worse over time."

@danneidle.bsky.social makes the case for big-picture tax reform.

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Resolution Foundation @resfoundation.bsky.social · 1d

The growth of National Insurance over time makes it more important than ever to worry about its design.

Read 'Call of duties' now, to learn why we propose switching 2p from National Insurance to Income Tax 👉 buff.ly/uLWun7f

chart showing Changes in tax revenue as a share of GDP, relative to 1948: UK

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Resolution Foundation @resfoundation.bsky.social · 1d

🏘️ 221,000 dwellings were approved in the year to June 2025, down by 7% on the previous year, and now at the lowest level since 2014.

Read our blog on the latest planning data⤵️ buff.ly/jdQnf5Q

Chart showing estimated number of dwelling units granted permission and net additional dwellings in the 12 months to the period shown: England

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Resolution Foundation @resfoundation.bsky.social · 1d

Wealth gaps between age groups have widened sharply in recent years.

The difference between those in their early 30s and early 60s has more than doubled in real terms since 2006-08, from £135,000 to £310,000.

Find out more about these trends in our latest report on wealth⬇️

buff.ly/Ya8kInK

Chart showing median real family net wealth per adult, by five-year age group: GB
Most age groups saw their wealth rise in the latest period, but gains were far from equal. Those aged 50-54 recorded the largest increase – typical per adult family wealth rose by £35,000 between 2018-20 and 2020-22 – but people in their late 30s saw only a £9,000 rise. These larger gains for older groups have widened existing wealth gaps: the difference between those in their early 30s and early 60s has more than doubled in real terms since 2006-08, from £135,000 to £310,000.

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Resolution Foundation @resfoundation.bsky.social · 1d

Catch up on this week's Top of the Charts to learn more about boons for boomers and busts for babies ⤵️ buff.ly/Hbpp38N

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Resolution Foundation @resfoundation.bsky.social · 1d

Council Tax arrears in England increased during the pandemic.

Arrears continued to rise during the cost of living crisis - with £445 million added to England’s stock of arrears between 2023-24 and 2024-25. This is much greater than the rise seen after the financial crisis.

Chart showing real-terms stock of Council Tax arrears at fiscal year-end: England
Total Council Tax arrears in England in 2024-25 stood at £6.7 billion in today’s prices, a 48 per cent real-terms increase since 2019-20

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Resolution Foundation @resfoundation.bsky.social · 1d

While overall financial resilience improved over the pandemic, some low-income families saw a sharp fall in savings.

10 per cent of families in the bottom income quintile saw their savings fall by £4,000 or more during the pandemic, twice the equivalent drop in the previous period.
buff.ly/Ya8kInK

Chart showing Change in liquid savings at the 10th percentile, by equivalised household income quintile in the first period (2017-18 and 2019-20): GB, 2017-18 to 2019-20 and 2019-20 to 2021-22

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Resolution Foundation @resfoundation.bsky.social · 1d

Passive wealth accumulation – where wealth increases due to rising asset prices – has been responsible for more than half the increase in average family wealth between 2010-12 and 2020-22.

Read more about what's been happening with household wealth in Britain in our latest report ⬇️

buff.ly/Ya8kInK

Chart showing estimated mean change in family wealth per adult over preceding two years, by type of wealth accumulation: GB

Since the start of the 2010s (2010-12), passive gains have accounted for 53 per cent of the growth in average family wealth, with the remaining 47 per cent coming from active accumulation.

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Resolution Foundation @resfoundation.bsky.social · 1d

We don't see any reason why landlords and lawyers shouldn't pay the same tax rate as their tenants and clients.

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Resolution Foundation @resfoundation.bsky.social · 2d

Passive wealth accumulation – where wealth increases due to rising asset prices – has been responsible for more than half the increase in average family wealth between 2010-12 and 2020-22.

Read more about what's been happening with household wealth in Britain in our latest report⬇️
buff.ly/Ya8kInK

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Resolution Foundation @resfoundation.bsky.social · 2d

Affordable housing stock has fallen drastically relative to population since the early 1980s ⤵️
buff.ly/pQXp2Sc

chart showing Affordable dwelling stock per 1,000 adults (left axis), and additional affordable homes (right axis): England

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Resolution Foundation @resfoundation.bsky.social · 2d

🏘️ The Government's housebuilidng targets are ambitious, but hitting them is key to reducing pressure on private rents and temporary accommodation.

Read more: buff.ly/jzJulXO

1. Hitting its ambitious housing target is key

Hitting the Government’s target of 1.5 million new homes in England over this Parliament, equivalent to around 300,000 new homes per year, would arrest the recent decline in Britain’s housing stock relative to its population.

With higher levels of housing-stock-to-population associated with lower average private rents, hitting this hard-to-reach annual housing target over the next decade should ease pressure on housing costs.

2. Boosting affordable housing stock is a bigger challenge

The supply of affordable homes has fallen drastically from a peak of 154 per 1,000 adults in 1979 to just 88 in 2024.

The Government’s allocation of £39 billion through the Social and Affordable Homes Programme over the next ten years is a welcome attempt to address this decline.

3. Lack of affordable housing has serious consequence

Five decades of decline means in England today there are 131,000 fewer affordable homes than there were in 1980.

There are 1.3 million households on local authority social home waiting lists and 131,000 households – including 169,000 children – were in temporary accommodation as of March 2025.

4. New homes must be built in the right places

Cities such as London, Oxford and Bristol have some of the most expensive housing markets in the country and should be prime targets. But it’s also important building is targeted not just to expensive areas, but also those with huge productivity potential, which hold the key to boosting economic growth. Therefore, building in rapidly growing areas like Birmingham and Greater Manchester should be a priority.

These major cities may be relatively affordable now, but housing demand and cost pressures will increase as productivity grows if housing stock doesn’t keep pace.

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Resolution Foundation @resfoundation.bsky.social · 2d

Wealth is unevenly distributed across Britain, but there is also significant wealth inequality within regions.

London is the most unequal region: in 2020-22, families at the 90th percentile of the wealth distribution in the capital held 12-times more wealth per adult than the median family

Chart showing Ratio of the 90th percentile and the 50th percentile of net family wealth per adult, by region and nation: 2006-08 to 2020-22

London, unsurprisingly, stands out as the most unequal region: in 2020-22, families at the 90th percentile of the wealth distribution in the capital held 12-times more wealth per adult than the median family. For comparison, the ratio between the 90th and 50th percentiles of net family wealth per adult across Britain as a whole was 5.2.

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Resolution Foundation @resfoundation.bsky.social · 2d

Britain's wealth gaps means that a typical worker would need to save more than a lifetime’s worth of their earnings to become wealthy

It would now take 52 years of typical earnings – £1.3 million in total – to move from the middle to the top of the wealth distribution.

➡️ buff.ly/Ya8kInK

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Resolution Foundation @resfoundation.bsky.social · 2d

And you can download and read Catherine's speech and slides from the Bank of England website here www.bankofengland.co.uk/speech/2025/...

Explaining the consumption gap - speech by Catherine L Mann

Given at the Resolution Foundation

www.bankofengland.co.uk

Resolution Foundation @resfoundation.bsky.social · 2d

And that's a wrap! You can watch back our event - Explaining the consumption gap - with External Member of the MPC at @bankofengland.bsky.social Catherine L. Mann @msaundersecon.bsky.social and Lord Willetts here

www.resolutionfoundation.org/events/expla...

Explaining the consumption gap • Resolution Foundation

Register to attend in person or to receive an access link for online viewers. In recent years, UK households have faced a number of economic challenges, contributing to subdued growth and increased li...

www.resolutionfoundation.org

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Resolution Foundation @resfoundation.bsky.social · 2d

The UK outlook for productivity is poor across the board but the Bank's view is far more pessimistic than the OBR (for now).

Catherine talks about a U-shape of productivity across firms, where mid-productivity firms are especially keen to invest to catch-up with top but face financial contraints.

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Reposted by Resolution Foundation

JamesSmithRF @jamessmithrf.bsky.social · 2d

Here at ⁦‪the Resolution Foundation‬⁩ we have Catherine Mann talking about demand weakness. Great event with Michael Saunders too: www.resolutionfoundation.org/events/expla...

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Resolution Foundation @resfoundation.bsky.social · 2d

Catherine follows up with a fascinating chart on how those cost pressures differed across the income distribution:

- Poorer households affected by rents, and energy prices.
- Middle income households affected by discretionary items.
- Richer households hit by higher mortgage payments.

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Resolution Foundation @resfoundation.bsky.social · 2d

Why is consumption in the UK still so weak?

One factor is the scarring effect of the cost of living crisis, says Catherine L. Mann.

Over that period, households experienced 12 years' worth of normal inflation in just two.

Livestream link here www.resolutionfoundation.org/events/expla...

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Resolution Foundation @resfoundation.bsky.social · 2d

External MPC Member Catherine L. Mann kicks off our event by noting that the main challenges to the UK economy are twofold:
- inflation remains persistently persistent
- the outlook for growth remains modest

Watch the event here www.resolutionfoundation.org/events/expla...

Resolution Foundation @resfoundation.bsky.social · 2d

This event is starting at 9.30am - watch the livestream here!

www.resolutionfoundation.org/events/expla...

NB - RF President David Willetts has replaced RF Chief Executive Ruth Curtice as Chair for this event...