Households face 'dismal' rise in spending power, says IFS

Friday, November 28, 2025 -British households are bracing for a sharp squeeze on their finances, as the Institute for Fiscal Studies (IFS) warns that growth in spending power will remain “dismal” this year. 

Rising energy costs, food inflation, and stagnant wages mean many families are struggling to cover essentials, with little relief in sight.

The IFS highlights that even modest income increases are being eroded by higher living costs, leaving households with less disposable cash for discretionary spending. 

Analysts warn this could slow economic growth further, as consumer confidence falters and households tighten budgets on non-essential goods and services.

Policymakers face mounting pressure to address the cost-of-living crisis. Without targeted interventions, the IFS warns that millions of households could see their standard of living stagnate or decline, signaling an urgent need for action to protect families from financial strain.