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Living standards squeeze to cost UK households £1,050, think tanks warn

Published 15:08 29 Oct 2026 GMT

Updated 15:08 29 Oct 2026 GMT

Lum Haliti
Living standards squeeze to cost UK households £1,050, think tanks warn

Homenews

The pressure falls hardest on people who are already struggling

Economists have warned that typical working households in the UK face a £1,050 income hit by 2029 despite Budget support.

This comes as living standards are barely rising.

According to the Resolution Foundation, typical working-age households are on course to lose £1,050 in disposable income by 2029.

For the real-terms fall of about 3%, athe Institute for Fiscal Studies says this decade is on track to be the worst on record for UK household income growth.

Locally, that squeeze is already visible.

This year, one council has confirmed a plan to hike council tax by 94% to help balance its books, piling extra cost onto already stretched budgets.

And the pressure falls hardest on people who are already struggling.

Previously, JOE also reported on the the worst places to live in the UK if you're young and unemployed.

The OBR's latest forecast calls the outlook a "pretty grim picture", blaming higher borrowing costs and inflation linked to the US-Iran war.

What the Budget actually does for households

Chancellor John Healey says his Budget buys the country "breathing space", while accepting cost of living pressures can "never" be "completely" removed.

At the same time, ministers have announced a £100 payment to help households cope with rising energy bills.

According to Ruth Curtice, Resolution Foundation chief executive, that will not be enough.

Even after the new payment has landed, she warned households will still pay more for energy than they did during the crisis of 2022.

A parliament of two halves for household income

"This parliament is increasingly looking like one of two halves," Curtice said. The first brought rising living standards, solid growth and extra public spending, she said, the second will be "tough going".

Curtice called the Budget "scattergun", arguing it does not match the scale of the problem.

Over the whole parliament, non-pensioner household incomes will have risen by "a paltry" £600 once tax, benefits and housing costs are counted, and most of that gain landed in the first five years.

How much will living standards fall by?

The Resolution Foundation expects a typical working-age household to lose about £1,050 in disposable income, a 3% real-terms fall, between now and 2029.

What is the government doing about rising energy bills?

Although the Resolution Foundation says bills will still be higher than during the 2022 energy crisis, Chancellor John Healey has announced a £100 payment to help with energy costs.