Money Wellness

cost of living

Published 03 Apr 2025

2 min read

Working-age households ‘to be £400 worse off this financial year’

The typical working-age household has been tipped to be hundreds of pounds worse off this financial year.

Working-age households ‘to be £400 worse off this financial year’
James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

Published: 3 April 2025

According to the Resolution Foundation, families will be put under pressure by factors including:

  • higher taxes
  • utility bill increases
  • benefits not keeping pace with the cost of living

Estimates suggest that this will drive the disposable income of a typical working-age household down by 1% in real-terms this financial year - that works out to a drop of £400.

The drop will be even higher for households in the poorest half of the country, with disposable income falling by 2% (£300).

However, the Resolution Foundation said this week’s increase in the national living wage is one “chink of light in an otherwise gloomy outlook”.

Universal credit increase should be brought forward

The Resolution Foundation acknowledged that many of the financial pressures facing households right now are “beyond the government’s control”.

However, it believes there are steps it can take to ease the pressure on family budgets.

For example, it said the planned 2% increase in the standard allowance of universal credit could be brought forward by six months to October 2025.

The Resolution Foundation believes this “one-off cost” of about £400m would help around 6m households.

What to do if you’re struggling

As the cost of living continues to rise, it’s well worth seeing where you can save money.

We’ve created a handy guide - 50 ways you can save money in ‘awful April’ and beyond - to help you drive down costs.

You should also try our budget planner, so you can see where money could be saved in your household and free up cash for vital expenses.

And don’t forget to use our benefits calculator, as you might be eligible for state support that could help you cover essential costs.

James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

James has spent almost 20 years writing news articles, guides and features, with a strong focus on the legal and financial services sectors.

Published: 3 April 2025

The information in this post was correct at the time of publishing. Please check when it was written, as information can go out of date over time.

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James Glynn - Money Wellness

Written by: James Glynn

Senior financial content writer

Published: 3 April 2025

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