In the years since the financial crisis, working age households have seen wage stagnation and rises in the cost of living, prompting widespread focus on the so-called 'squeezed middle'.
This report looks at the reality of middle income households coming out of the downturn – using the British Household Panel Survey and Understanding Society to track specific households over time.
Middle income households have shown remarkable resilience. Many have taken on more work and increased their incomes. There is a surprising amount of movement across the income distribution, with many climbing up. Middle income households have also shopped around and cut back to reduce the effect of rising prices.
But for many of these households, the squeeze may be yet to come when mortgage rates rise again. And in some markets it is much harder to compare products and secure value for money. With competing pressures on public spending, these households can nevertheless be helped by supporting them to do what they already do well – shopping around, comparing prices and switching.
