Cost of living over the decades: What life looked like in the 70s, 80s and beyond

Oxford defines the standard of living as the “level of material well‐being of an individual or group, in terms of goods and services available to them.” Alongside health, it is one of the key measures of quality of life.

As the price of the things Brits need and want rises at its fastest in 40 years, warnings that living standards are falling abound.

It all comes down to real wages – if salary increases trail behind inflation, people are able to buy less. Inflation for the 12 months of 2022 came in at 10.5 percent, during which time regular pay increased by just 5.9 percent, according to the Office for National Statistics (ONS).

This means a UK resident’s annual paycheck enabled them to get 4.6 percent fewer items than they could have afforded a year ago – in other words, their standard of living worsened.

To put this notion into historical context, Express.co.uk has taken a look back at what money could buy around the turn of each decade of the past half-century – with all prices inflation-adjusted to the present day – to see if older generations were actually better off.

READ MORE: State pension 'not enough' to meet minimum living needs

1970

Farewell Beatles, hello Disco, the Swinging Sixties are through – it’s 1970 and life in the UK is very different from what it looks like today.

Back then, the average house sold for the equivalent of £57,000, according to Nationwide’s historical tracker – just under five times less than the £260,000 bricks and mortar go for today.

The median wage in Britain’s post-war industrial economy, meanwhile, was around £13,000 a year. In affordability terms, this means property was 4.4 times annual pay back then. That rate has almost doubled today, meaning people have to save up for twice as long.

The car ownership boom was still well underway in the early Seventies. The best-selling motor of the decade – the Ford Cortina – would set a family back £11,500. The latest Ford Focus now costs twice as much.

And why would people not drive when petrol cost 9.3p a litre – 15 times less than the 143p charged in forecourts 50 years on. The 1973 and 1979 oil crises, however, quickly put paid to this cheapness.

1980

In 1980, listening to the up-and-coming Brummie band Duran Duran on a new Sony Walkman cost just over £300. The latest generation iPod introduced a few years ago hit shelves at £600.

Vinyl records, on the other hand, cost roughly just as much today as they did back then, at around £40 for a new press.

A loaf of white bread would set you back £1.28 at the beginning of the Eighties, and a pint of milk £0.60. Thanks to growing imports and fierce price competition between supermarket chains since then, basic foodstuffs are actually cheaper nowadays – or at least they were on the eve of today’s meteoric food price inflation in 2021, when bread and milk cost just £1.07 and £0.46 respectively.

Sky-high inflation spikes in the Seventies meant real wages had progressed to just £18,000 by 1980, with a typical house costing five times this at £92,000. The exodus from industry and manufacturing towards more lucrative services under Margaret Thatcher, however, helped usher in an era of newfound prosperity for the former “sick man of Europe”.

Emily Fry, an economist for independent think tank Resolution Foundation, told Express.co.uk: “In the Seventies, Eighties and Nineties we saw decadal wage growth, decadal income growth and GDP per capita growth that was really quite substantial – we’re talking 30 percent over that time.”

1990

England roared to the FIFA World Cup semi-final in 1990, before losing out to tournament winners West Germany on penalties.

Spoilt for choice between one of the UK’s 64,000 pubs – some 20,000 more than line the streets today – football fans could get a pint for just £2.58. Those watching Qatar 2022 matches in boozers last year paid over £4.50.

The median annual wage had risen to £24,000 by then, while house prices hovered around £115,000 – still around five times higher. Renters could expect to pay an average of £330 a month in the UK, excluding London, almost four times less than the £1,200 going rate today after a year of record rises.

Nineties babies cost roughly £5,500 to raise for the first year in 1990. This can range up to £7,200 in 2023, according to MoneyHelper.

2000

The turn of the millennium saw the median wage cross the £30,000 threshold. Asking prices averaged £142,000 – still around five times salaries – but would almost double by the end of 2005 to £260,000.

Energy costs also began to soar. In 2000, typical households could expect to spend £1,200 a year on their gas and electricity bills, according to the Sustainable Development Commission. After astronomical increases over the past year, typical dual-fuel customers now pay £2,500 a year.

Passed into law in 1998, the Teaching and Higher Education Act allowed universities to charge tuition fees for the first time. In today’s money, four years of undergraduate study in 2000 cost £7,200. Since 2017 this can run to £37,000.

The financial crisis and subsequent recession ensured many of these qualified youngsters would struggle to find work upon entering the job market. The year 2008 marked a turning point, according to the Resolution Foundation, which believes real wages won’t return to that year’s levels until 2026.

Ms Fry said: “In the mid-2000s income growth started to fall and we started to see the leading indicator of wages starting to peel off, but then you also started to see some GDP per capita and annual household disposable incomes tail off. The last 15 years or so have really been a disaster for living standards growth.”

2010

The year David Cameron’s coalition Government came to power, the median wage stood at £34,500 – notably above the £33,000 in 2022.

Two years of house price deflation meant the average property fetched £230,000 in 2010, less than 2005 but still a marked hike to 6.7 times wages. In a bid to induce spending and reinvigorate the economy, interest rates were slashed to a record low 0.5 percent.

Borrowing money became cheaper and cheaper over the decade. The average rate for a five-year fixed mortgage in 2008 was 4.5 percent in 2010, plunging below two percent in 2019.

A movie date out to see the 2010 Oscar winner The King’s Speech would have cost just under £17 for two on average. The same outing today starts at £26, a bill you could easily double with drinks and popcorn.

Ms Fry added: “The key thing here is that real wages haven’t really grown since 2008. In fact, at the levels that we’re at now, the most recent forecasts by the OBR suggest we’re not going to get back to 2008 real wage levels until 2026.”

2023

All this brings us to the present day. After just over a decade of stagnation, 2022 sent the country into living standards reverse. Despite £58billion in cost-of-living support, median household incomes fell by three percent in the 2022 to 2023 financial year, according to The Living Standards Outlook 2023 report.

Ms Fry said: “We’re also seeing one of our projections showing a rise in absolute poverty.” A household is said to be in absolute poverty if it has less than 60 percent of the median income. The increase they forecast between 2016 and 2026 will be the “first ten-year period on record where absolute poverty has risen rather than fallen.”

According to the OBR, real household disposable income per person is on course to fall by a cumulative 5.7 percent over 2022/23 and 2023/24.

Ms Fry concluded: “Obviously we have a lot more choice now, and living standards, if we look at like-for-like, are better now. But if we think about the prospects for the future generations, we’ve historically had this social contract that it’s going to get better, that we’re going to grow, we’re going to have more diverse things to consume, we’re going to have higher quality things, we’re going to have higher living standards, people’s work is going to be better.

“Those kinds of aspects of our economy are uncertain right now and really need to be thought through in a much deeper way.”