Publication type
Report
Authors
Publication date
February 15, 2024
Summary:
The ‘squeezed middle’ is now the ‘precarious middle’ with those on middle incomes* struggling to save, and more likely than before to be in insecure jobs and insecure homes. For single parents, the problem is particularly acute, with those who are in work more likely to be in insecure work than not.
'Caught in the middle', published today from Professor Donald Hirsch at the Financial Fairness Trust and Eleni Karagiannaki from the London School of Economics, found:
1) Job insecurity among the middle third of the income distribution appears to have got worse since it was highlighted nearly thirty years ago. In particular, insecure work has grown sharply for single adults; 2) Private tenants face housing insecurity, often with unaffordable rents; 3) People on middle incomes face a high chance of being lower down the income distribution next year, due largely to unstable job markets.
The report highlights the importance of helping people on middle incomes to save. Increased income insecurity makes it all the more important to be able to save for a rainy day. But the report calculates that middle income households building rainy day and pension savings, while also paying back student loans and facing high housing costs, can be left with too little remaining income for an acceptable living standard today.
Professor Hirsch, Policy Advisor at abrdn Financial Fairness Trust, said:
“Being on a middle income does not make people secure. In the present cost of living crisis, the vulnerabilities of people on modest incomes have become more apparent. They face significant uncertainties, and are rightly encouraged to save both for rainy days and their retirement. Yet if they are also paying off student debt and have high housing costs, it becomes difficult to maintain a decent living standard today – even at the minimum level often associated with lower income groups.
“Measures to improve predictability, stability and the right to flexible working had been promised for the present Parliament, but were not delivered. In the coming Parliament, this should be a priority.”
Subjects
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