TUC finds UK households paid £13,961 extra on bills since 2021

UK consumer spending lags every G7 peer since pre-pandemic

The Trades Union Congress, in an analysis of Office for National Statistics figures, said UK households have paid an additional £13,961 on bills on average since 2021 — about £2,792 a year — with the union attributing the rise to soaring inflation triggered by the exit from the Covid pandemic and wars in Ukraine and the Middle East, and to higher costs on mortgages, loans, energy and water. The union used the figure to press Chancellor John Healey to ease cost-of-living pressures ahead of his budget on 28 October, arguing that Britain has posted the weakest consumer spending growth in the G7 since before the pandemic.

The analysis lands ahead of a budget the Treasury has framed as “tightly focused” against rising borrowing costs, with the International Monetary Fund this week urging Healey to stay the course on deficit reduction while lobby groups press him to support households and businesses through the winter.

According to the TUC’s analysis of Office for National Statistics figures, households with mortgages have spent an average of £9,034 extra on repayments since 2021 — about £1,806 a year — while those with loans paid £1,911 extra in total, or £382 a year. Households spent an average of £2,644 more on electricity and gas bills since 2021 (around £529 a year) and £372 more on water bills (about £74 a year). Average rental costs have risen at a higher rate than mortgages, the union said, suggesting that mortgage costs are being passed on to renters.

Paul Nowak, the TUC general secretary, said: “From austerity to the pandemic to energy shocks and Trumpflation, working people have borne the brunt of crisis after crisis. When the crackpots in the White House or the Kremlin launch an illegal war, everyone pays the price in their bills.”

In a second statement, Nowak said: “Eye-watering bill rises have hammered household budgets, squeezing consumer spending. That’s being felt on high streets up and down the country, holding our economy back.

“The chancellor needs a serious plan to put working people at the heart of growth, raising living standards so Britain can afford to spend. That means shielding households from punishing energy spikes and putting more money in workers’ pockets.”

The TUC urged Healey to launch a social energy tariff, take action to help poorer households and young people with rising living costs, raise capital gains tax and raise taxes on banks.

In his speech at Labour’s conference in Liverpool, Healey pledged to use his 28 October budget to give households “breathing space”, but warned that the government had limited resources to soften the global economic shock hitting Britain. The Treasury has been preparing a “tightly focused” budget to limit the potential for a market backlash from large tax and spending measures. The IMF this week urged Healey to “stay the course” to cut the budget deficit amid rising borrowing costs in global financial markets.

The chancellor is under growing pressure to take action to support households and businesses before the winter amid predictions that consumer energy bills could reach £2,000 a year from January for the typical household.

After retail industry bosses pressed Healey for support in Downing Street meetings on Tuesday, the Confederation of British Industry said he should listen to calls for a cut in employer national insurance contributions to encourage firms to take on younger workers. The lobby group also called for cuts to business electricity costs, changes to business rates and measures to support private investment.

In a separate report, the centre-left IPPR thinktank urged Healey to raise £16bn, mostly through a rise in capital gains tax that would be softened by a new entrepreneur “super exemption”. It was reported on Tuesday that Healey had rejected calls from Labour MPs and thinktanks to use the budget to equalise the rates at which capital gains and income from work are taxed.

The IPPR said headroom against the chancellor’s fiscal rule was likely to have shrunk by between £7bn and £15bn since the spring amid the impact on government finances from the Middle East war. Calling for a cost-of-living package funded largely by higher taxes on wealth, it urged Healey to introduce a “rent stabilisation mechanism” to cap private rent increases, alongside a £2,000 cap on consumer energy bills, a freeze in fuel duty and an increase in housing allowance benefits for households on universal credit.

Broader figures show that consumer spending remains behind pre-pandemic levels, after a period of broadly flatlining growth in household disposable incomes since the 2008 financial crisis. The Treasury has been approached for comment.