Typical working-age households in the UK are set to see their disposable income fall by £1,050, or three per cent, by 2029, according to Resolution Foundation analysis published this week, as sluggish growth, weak wage rises and stubborn inflation continue to squeeze family budgets. Chancellor John Healey warned in the Daily Record that he cannot remove all the pressures facing the economy, pointing to wars in Ukraine and the Middle East, soaring energy costs and slow wage growth.

Why incomes are under pressure

The warning follows Chancellor Healey's first Budget on 28 October, which offered targeted help, including a £100 energy payment for households in lower council tax bands, but left many of the biggest pressures in place. The Resolution Foundation's estimate covers typical non-pensioner households: a 3% fall between 2026-27 and 2028-29, equivalent to £1,050. The Institute for Fiscal Studies has described the 2020s as on course for the weakest growth in inflation-adjusted household disposable income of any decade since its records began, while the Office for Budget Responsibility expects real household disposable income per person to rise by an average of 0.75% a year through to 2030-31, and raised its inflation forecast for 2027 from 2% to 3.4%.

Ministers are being urged to aim limited resources at the households that need help most, rather than spreading support thinly. Campaigners and experts say the remaining years of the decade could prove harder for family finances than the period after the 2008 banking crash, and the government has itself acknowledged that the £100 energy payment does not go far enough on its own. The Treasury argues its Budget package offers what help it can afford while staying within its fiscal rules, but the debate now turns to whether further targeted support will follow in the months ahead.