How factoring savings and debts into our picture of household finances can improve our understanding of how to achieve a more socially just future.
JRF’s mission is to support a transition to a more socially just future. We believe two crucial steps towards achieving that are:
Income, savings and debt are crucial factors to both of those aims.
Living standards and inequality are often discussed in terms of the flow of weekly or annual income. But just as companies are assessed through balance sheets detailing what they own and what they owe, a rounded picture of household finances must include their income, savings and debt.
Families with no savings can be one broken boiler or car breakdown away from crisis and poverty. This is not a fringe group. Recent estimates suggest that around a quarter of the adult population has less than £100 put away in savings. And when people enter poverty, they are likely to fall into debt or arrears on basic household bills or rent. In this way escaping one emergency can bring about the next, as the weight of debt raises the risk of destitution and homelessness.
Families in this position are exposed. Millions of Britons look ahead to retirement with fear, knowing they don’t have enough put aside to live as they would wish to. With dwindling rates of home ownership among the working-age population, fewer people are acquiring a property to fall back on. And too few have sufficient rainy-day funds to get through anything other than a short break in earnings.
Bold action on housing, energy, social security and insecure work can return incomes to growth for low- and middle-income households, more than offsetting price shocks from Middle East conflict.
People aged 35–59 are a pivotal swing voter group that all political parties need to appeal to. They're also the most economically insecure in Britain. What policies will throw them a lifeline?
Tom Clark introduces his run of four essays about the role of assets in social injustice – and progressive ideas to spread ownership.
