We Are Poorer – and the Numbers Prove It
Every now and then a nostalgia post pops up on Facebook. Someone shares an old photo of a corner shop window: Mars bars at 15p, a loaf of bread under a quid, petrol at 59p a litre. The comments pour in: “Weren’t we better off back then?”
Normally, I’d dismiss it as rose-tinted memory. But the thing is – the numbers back it up.
Houses and incomes: the widening gap
Let’s start with the biggest purchase of most people’s lives: a home.
- In 1997, the average UK house price was £59,587. The average income was £16,718. That’s a house-to-income ratio of around 3.5 times earnings. Manageable.
- In 2025, the average UK house price is £299,331. The average income? £38,224. That’s 7.8 times earnings.
So even though incomes have more than doubled, house prices have gone up five-fold. You now need twice as much of your lifetime’s income to buy the same average house.
That’s not progress. That’s erosion.
Everyday goods tell the same story
It isn’t just property. Look at cars, clothes, food, energy. In almost every case, the affordability has worsened.
- Cars: A new Ford Escort in the late 90s was under £10,000. Today’s Ford Focus starts at £28,000+. Wages haven’t tripled.
- Energy: Domestic electricity prices have risen over 300% in 25 years. Wages? Barely doubled.
- Food: The Office for National Statistics basket shows staples like milk, bread, and meat rising faster than average pay.
Yes, technology has given us more choice – smartphones, streaming, online shopping. But the basics of living? They take up more of your income than they used to.
Why it feels harder now
People aren’t imagining it. When your parents or grandparents bought their first home, it cost them three or four times their annual salary. For you or your children, it’s closer to eight. And that’s before interest rates, energy bills, or childcare.
This is why two incomes are now needed in most households just to tread water. Not to live extravagantly. Just to cover the mortgage, utilities, and food shop.
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The uncomfortable truth
We are poorer. Not in the sense that we earn less cash than in 1997 – the payslips prove otherwise. We are poorer because our money buys us less security, less space, and less breathing room than it did for the generation before us.
And the nostalgia posts? They aren’t really about the price of a Mars bar. They’re about the loss of that stability – the sense that an ordinary wage once covered an ordinary life, and now it doesn’t.
Final word
We can argue about interest rates, government policy, or global markets. But the fact remains: wages and house prices have stopped moving in step. Goods that once tracked earnings now outpace them.
The maths doesn’t lie. By the most important measure – the ability to house, feed, and support a family on an average income – we are poorer.
