We don't - and there are two effects: larger families already affected by the cap don't gain, and some gaining families won't see the full increase because they will come up against the cap. Looking at www.gov.uk/government/s..., just under half of capped families in May 2025 had 3+ kids (~60k).

See gov.uk/government/p... for the DWP analysis and look out for @jrf-uk.bsky.social analysis on overall living standards shortly, showing there is more to do to tackle this more broadly.

Congratulations - this has been very useful

With earnings barely increasing, many families are likely to experience mounting financial pressures, eroding living standards.

Weak real earnings growth will be particularly concerning for lower-income households. Inflation remains above the Bank of England’s target, with food and housing costs continuing to rise faster than the overall price level.

We need an independent process to advise on a standard allowance rate that reflects what people need to afford the essentials, and for rates to quickly move towards that level.

The annual gap still likely to be more than £1,000 for singles and £2,500 for couples. Look at how little next year’s increase moves rates towards a level that enables people to afford the essentials.

This means the standard allowance is set to rise from £92 to £98 per week for singles and from £145 to £154 per week for couples. However it will remain below the level needed to afford a basic basket of essentials.

Thanks Noah, but I'm looking at UK not US earnings - see www.ons.gov.uk/employmentan... for the official data I am using.

Great question. Answer is a bit of both, but higher inflation is the biggest driver, with similar (if lower) nominal wage growth this year compared to last year.

Unless we get strong growth in one of the next two months' data, annual earnings growth will fall to ~zero in data out on 11th Nov, before Budget, highlighting the importance of decisions there.

Without the security of affordable housing, a stable job & adequate social security, it's hard to take risks, invest in your future or be productive at work. Rising living standards aren’t just a desirable by-product of growth, they're an essential ingredient to a strong economy.

Thanks for picking this up. It's based on series A2FC in tab '6. Real AWE' in the spreadsheet at www.ons.gov.uk/employmentan.... We've waited a few months to be sure it's not a blip, but the earnings slowdown (mainly due to higher inflation) feels a real effect to us.