UK’s middle class will struggle till at least 2020: study

Millions of middle class Britons will not see their disposable income levels rise to pre-recession levels until at least 2020 - even as the upper half of UK society continues to get richer at about 10 per cent a year, a report from leading think tank Resolution Foundation has said.

The study, which focuses on the state of the "squeezed middle", looks at the situation of 10 million adults who crucially do not rely heavily on the state welfare system, and their 5.2 million children.

It defines the squeezed middle as households earning between £12,000 (Rs9.3 lakh) and £41,000 (Rs32 lakh) a year, differentiated by whether they have children or not.

A growing number of people in the UK plan to cut back on their spending this year, the survey says. Some 33 per cent of adults now plan to spend less in 2012, a rise from October when 19 per cent said they would cut back, the foundation said.

About a quarter of those surveyed said they expected their finances to get worse this year.

The survey comes just days after official figures showed the UK's unemployment rate had risen to the highest level for 16 years.