Overview
- Retail Economics reports that discretionary income fell 2.1% for the least affluent between July 2024 and October 2025, while the most affluent saw a 10.3% rise.
- The consultancy defines discretionary income as money left after essential bills and taxes, and says its method captures changes not fully reflected in ONS data.
- The Office for Budget Responsibility expects real disposable income to grow by just 0.6% in 2026, with Bank of England data indicating pay settlements easing from 3.9% in 2025 to 3.5% in 2026.
- The Chancellor’s extended freeze of income tax thresholds to 2030–31 is forecast to raise £8.3bn, and the Resolution Foundation estimates the typical worker will be £1,400 worse off by decade’s end.
- The Treasury says households are already £800 better off since Labour took office and points to a £150 average energy bill cut, frozen rail fares and prescriptions, and policies it says will lift more than 500,000 children out of poverty.