Families across England are bracing for higher mortgage payments in the coming months, with one Ipswich homeowner warning that her interest rate could jump from 1.4% to about 5.3%, adding roughly £250 each month to her housing costs. Dawn Fazackerley-King, a 42-year-old self-employed Pilates instructor with a household income of about £70,000 a year alongside her office-working husband, says the family has already trimmed discretionary spending and faces a difficult question: where the extra money will come from. "We just have to find that money from somewhere, but when you look at the direct debits every month, there's nothing fancy in there," she explains, listing only essential bills including council tax and energy costs.
A significant portion of British households report experiencing these pressures. According to an Office for National Statistics survey in August, 55% of adults said their cost of living had increased compared with the previous month. Whilst this represents an improvement from August 2025, when 62% reported rising costs, the persistence of the problem suggests it has become a long-term issue rather than a temporary crisis. Among those facing higher expenses, the most common drivers were food shopping prices, fuel and energy bills.
Prime Minister Andy Burnham has announced several measures aimed at providing relief. He introduced a £2 cap on most single bus fares in England and implemented a cut to VAT on domestic electricity bills. More recently, he announced plans to remove standing charges on gas bills. Yet households like Fazackerley-King's express frustration that these measures amount to temporary fixes. "The government are trying to put sticking plasters over gaping wounds," she says, "which are not fixing the problems."
Jessica Taylor, a 41-year-old single mother in Clacton-on-Sea with an annual income of about £26,000, describes living "month to month" on Universal Credit. She and her mother Karen Badenoch run a community interest company offering free money management sessions, where they regularly encounter people in employment accumulating credit card and buy-now-pay-later debt simply to reach the end of each month. Badenoch advises that openness about financial difficulties is essential: "The biggest thing that anyone can do is be open... and look at what your issues are, and that way you can resolve them."
The Office for Budget Responsibility has predicted that real household disposable income will increase by an average of 0.75% a year between 2026 and 2030, substantially lower than the 3% annual growth recorded between 2000 and 2007. Chancellor Healey has committed to keeping the three main taxes unchanged while delivering what he describes as "growth in every postcode, while giving businesses and families some breathing space." He will deliver his Budget on Wednesday.
For savers and borrowers in the UK, the combination of anticipated mortgage rate rises and modest income growth projections suggests continued financial pressure on middle and lower-income households throughout the coming years.