Wealthy families in the UK experienced a sharper rise in living costs than low-income households for the first time since March 2025, according to new data from the Office for National Statistics (ONS). The figures, released as part of the Labour government's Household Costs Indices (HCIs), show that costs for the highest-earning households jumped by 2.8 per cent in the year to June 2026, compared with a 2.7 per cent rise for the lowest-income families.
Higher earners feel the squeeze ahead of Autumn Budget
The revelation comes ahead of the Labour government's Autumn Budget, which is due to be delivered on October 28. Sarah Coles, a financial analyst at AJ Bell, said the figures illustrated how using wealthy families as “tax-producing machines” had made life “more uncomfortable” for higher earners.
Coles added: “Higher earners have seen their costs rise by almost a third in the past five years, and while they have more wiggle room in their budgets to cut costs when they need to, budgets will be getting tighter.” The gap between the two groups is narrow but notable, marking a shift in the cost-of-living burden towards those at the top of the income scale.
Chancellor and Mayor respond to fiscal pressure
Andy Burnham, the Labour leader, and his Chancellor, John Healey, are preparing to set out their fiscal plans later this year. Mr Burnham insisted on Wednesday that he was focused on taking the “pressure off” households and businesses even as he described the fiscal backdrop as “challenging”.
In an interview with the Financial Times, Mr Burnham backed entrepreneurs and business owners, saying: “Of course, we need wealth creation and the best wealth creators not just forging their path here, but staying here.” However, the former Manchester mayor said that entrepreneurs should also have a social duty. Asked whether he would tax the wealthy out of Britain, he replied: “No, definitely not.”
Government defends measures to ease household costs
A Treasury spokesman responded to the ONS figures by emphasising the government's commitment to supporting working families. “The Government is focused on giving families breathing space and recognises the pressure working people can be under to make ends meet,” the spokesman said.
“That’s why we have cut VAT on electricity bills on top of freezing prescriptions and rail fares, and increasing the national minimum wage for millions of workers.” These measures are part of a broader effort to cushion households against rising costs, even as higher earners face a growing share of the burden.
