UK's Poorest Now Worse Off Than Slovenia and Malta Amid Stagnant Living Standards, NIESR Report Reveals
March 13, 2025
Senior economist Max Mosley warns that the stagnation in the UK’s economy poses a threat to its high standard of living, exacerbated by low productivity growth and welfare cuts.
As a result of nearly a decade of welfare cuts and stagnant incomes, the UK has fallen down the list of affluent nations, according to the NIESR.
From 2020 to 2023, welfare cuts and minimal real income growth led to a decline in living standards for the bottom 10% of earners in the West Midlands, dropping below levels found in parts of Slovenia.
However, Reeves is also expected to outline further cuts to welfare benefits in her spring statement, aiming to adhere to previously established budget rules.
A recent report from the National Institute of Economic and Social Research (NIESR) highlights that Britain's poorest households are now financially worse off than those in Slovenia and Malta, primarily due to nearly two decades of stagnant living standards.
The report reveals that the poorest districts in Britain rank below the lowest-income areas of Slovenia and Malta, with Birmingham identified as having some of the most impoverished areas in the UK.
It also points out that tax and benefit changes have worsened living standards in Britain, which now has one of the least generous welfare systems among developed countries.
Welfare benefits in Britain are particularly low compared to similar economies, ranking poorly in welfare generosity among OECD countries, especially when assessed against average wages.
The report emphasizes that the UK is the only G7 nation whose living standards have not returned to pre-pandemic levels, with average household disposable income 1.2% lower in mid-2023 compared to 2019.
NIESR recommends abolishing the two-child benefit cap and increasing benefits to ensure they adequately cover living costs, alongside boosting public and private investment.
In response to these challenges, Finance Minister Rachel Reeves is planning increased public investment and reduced regulatory barriers in her upcoming budget update on March 26, 2025.
Despite the poorest 10% in Britain having higher cash income than their counterparts in Slovenia and Malta, the higher cost of living in Britain significantly diminishes their relative financial well-being.
Summary based on 4 sources
Get a daily email with more World News stories
Sources

The Guardian • Mar 12, 2025
UK drops down list of affluent nations after decade of stagnation, NIESR finds
The Independent • Mar 12, 2025
Poorest in Britain worse off than Slovenia and Malta after 15 years of stagnant wages, report warns
Express.co.uk • Mar 13, 2025
UK households 'worse off than those in Slovenia and Malta' as living standards 'stagnate'
Global Banking And Finance Review • Mar 12, 2025
Britain's poorest households worse off than those in Slovenia, think tank says