Only one in five people expects to be better off in two years' time

Deep pessimism among the public about the length and depth of the economic downturn is revealed today by a poll which finds that only one person in five expects to be better off in two years’ time.

Research carried out for the Resolution Foundation think-tank also suggests that many people are struggling to cope with the cost of essentials such as food and fuel.

It found that 46 per cent of people expected to be worse off at the time of the next election in 2015, while another 28 per cent thought their finances would be about the same.

Just 19 per cent believed they would better off and seven per cent did not know.

Asked which specific measures would best boost their living standards, nearly two-thirds (65 per cent) cited a reduction in the cost of food and fuel, followed 47 per cent who wanted a cut in petrol duty and 35 per cent who wanted the rate of VAT to be trimmed and the same proportion who opted for a cut in tax for people on low and middle incomes.

According to the survey by YouGov, the electorate is broadly split over whether it will still be possible for the Coalition to preside over steadily rising living standards by the next election.

Exactly half the public thinks that, with the right policies, overall economic growth should lead to rising family living standards. However, 35 per cent think this is now beyond the ability of governments to achieve.

Gavin Kelly, the chief executive of the Resolution Foundation, which studies low and middle income groups, said: “Despite the stagnation of recent years, including in the period prior to the recession, the majority of people still think that with the right policies growth will translate into steadily rising living standards.

“They want their share of the future gains from growth. However, a large minority appear to have lost faith in this belief which is concerning given that the legitimacy of our economy rests on it.”