The Labour government’s economic policies have reportedly left the most vulnerable Britons with even less disposable income
The poorest UK households have only become poorer under Prime Minister Keir Starmer’s Labour government despite its promises to boost living standards, several British outlets reported on Friday, citing recently published analytical data.
Disposable income left after bills and essentials for the least wealthy households in the UK fell 2.1% during the period between July 2024 (when Labour took office) and October 2025, The Telegraph wrote, citing data published by Retail Economics, an independent research consultancy.
Conversely, the discretionary spending among the UK’s richest households has increased 10.3% during the same period.
“Lower income families are still grappling with the legacy of surging prices, with finances playing catch up as the cost of everyday products is significantly higher than it was four years ago,” the Telegraph wrote, citing Retail Economics’ Head of Commercial Content Nicholas Found.
A whole “generation of younger, lower to middle-income households” is feeling poorer than they were five years ago, being forced to prioritize essentials and cut back on discretionary spending, he reportedly said.
According to the UK’s Office for Budget Responsibility, due to “gradually slowing real wage growth and rising taxes,” real household disposable income is only expected to grow by 0.6% in 2026.
The Labour government announced £26 billion ($35 billion) in tax hikes in its November budget, which was widely seen as a breach of prior promises. Simultaneously, Chancellor Rachel Reeves reaffirmed plans to ramp up military spending by 2.6% of GDP, despite recognizing that her budget would squeeze “ordinary people.”
Starmer’s handling of the economy, as well as his crackdown on free speech in the UK amid the country’s migration crisis, has led to a plummet in his approval ratings. Only 15% of Britons think that he is doing well as prime minister, according to this week’s YouGov poll data.
With local elections coming in May, a recent YouGov voting intention survey showed both Labour and the Conservatives trailing behind the Euroskeptic Reform UK party by more than 8%.
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