Higher earners are disproportionately affected by rising costs, according to official figures from the Office for National Statistics (ONS). For the first time since March last year, wealthier households are seeing prices increase more than poorer ones. The data also suggests that working individuals are experiencing greater impacts from the rising cost of living than retirees.

These findings emerge following recent statements from former Chancellor Rachel Reeves, who advocated for those with the "broadest shoulders" to contribute their "fair share" and subsequently introduced tax-raising measures in the autumn Budget, impacting higher earners. Prime Minister Andy Burnham has pledged to provide "breathing space" for households facing financial strain due to the increasing cost of living.

In the year to June 2026, annual inflation reached 2.7 percent for low-income households and 2.8 percent for high-income households. Retired households experienced a 2.5 percent inflation rate compared to 2.9 percent for working households in June of this year. While inflation fell for both groups between March and June, the disparity between them widened by 0.4 percentage points.

Private renters faced the highest annual inflation rate at 3 percent in June, exceeding rates for social renters and homeowners. This economic pressure coincides with a general increase in anxiety among Britons, who report feeling more anxious than at any point since December 2023, according to a quarterly ONS wellbeing report.

Women, in particular, reported higher rates of anxiety compared to men, with young adults aged 20 to 24 being the most anxious demographic. Shadow Chancellor Sir Mel Stride commented that under the current administration, "everything seems to be getting worse," citing increases in business costs, living costs, and a heavier burden and increased anxiety for individuals trying to manage basic expenses.

Anne Strickland of the TaxPayers' Alliance stated that "working households are being squeezed, with renters and non-retirees still hit hardest by rising costs." She added that "the cost-of-living crisis is far from over for taxpayers who are funding a state that keeps demanding more."

A Treasury spokesperson highlighted actions taken by Chancellor John Healey, including the removal of VAT on electricity bills this winter, a 20 percent reduction in business rates for pubs, clubs, and live music venues next year, and a cap on bus fares at £2 throughout 2027, aimed at providing relief to families and businesses.