Finances | Brits face £1,200 pay shock by 2025

According to new data released by think tank the Resolution Foundation, a group focused on ‘improving living standards for people on low incomes’, fallout from the COVID-19 pandemic could well see the average pay packet cut by up to £1,200 a year by 2025.

The news, which comes just a day after Chancellor Rishi Sunak released the Government’s revised budget and warned that much more financial adversity was on the way for the UK, is symptomatic of a wider economic downturn which looks set to ‘squeeze’ living standards, the foundation stated.

"The COVID crisis is causing immense damage to the public finances, and permanent damage to family finances too, with pay packets on track to be £1,200 a year lower than pre-pandemic expectations," noted Torsten Bell, Chief Executive of the Resolution Foundation in conversation with the BBC.

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The news will be potentially devastating to workers in lower-income households, as analysis shows that incomes have been growing at a slower pace – even before the pandemic took hold. Incomes are on course to grow by just 10% in the 15 years from the start of the 2008 global financial crisis to 2023.