Thu, 27 Nov 2025

Thu, 27 Nov 2025 Households face 'dismal' rise in spending power, says IFS

Average disposable income is set to grow by "only" 0.5% annually over the next five years, the think tank says.

* Average disposable income is expected to rise by just 0.5% over each of the next five years, according to the government's official forecaster.
* IFS boss Helen Miller says this increase is "truly dismal" and a breach of Labour's manifesto promise not to raise taxes on working people.
* The increase in National Insurance, cap on salary sacrifice pension payments, and freezing of tax thresholds have all contributed to the poor outlook for living standards.
* According to the IFS, average disposable income per person will rise by nearly £104 a year over the next four years under current inflation forecasts.
* Resolution Foundation think tank predicts that the growth in living standards in this parliament will be the second worst on record.
* Chancellor Rachel Reeves denies breaking manifesto pledges and says her policies are necessary to address fiscal pressures.
* The Budget has been criticized for not doing enough to boost economic growth, with IFS boss Helen Miller saying "we shouldn't expect every Budget to solve all of our problems" but that the government should be doing more.
  >>