UK living standards fell in Q1 2026 despite fastest G7 growth
6 reported
New data from the Office for National Statistics shows that UK living standards fell in the first quarter of 2026, even as the economy grew at the fastest rate among G7 countries. Real household disposable income per head shrank by 0.8% in Q1 2026, meaning people had less money to spend after taxes. The ONS reported that while pay and income from property rose, this was offset by higher taxes on wealth and income and a fall in net social contributions. The household saving ratio fell by 0.7 percentage points to 8.9%, indicating people had less money to put aside as rising prices pushed up the cost of living. The ONS confirmed that the UK economy grew by 0.6% in January-March, the fastest growth recorded by any G7 country. The data highlights the challenge facing Andy Burnham as he pledges to "lift the country back up," according to the report. The ONS also revised down its estimate for UK GDP growth in 2025 from 1.4% to 1.3%.
What’s reported
Real household disposable income per head fell by 0.8% in Q1 2026.
The UK economy grew by 0.6% in Q1 2026, the fastest growth among G7 countries.
The household saving ratio fell by 0.7 percentage points to 8.9%.
Higher taxes on income and wealth increased by £6.9bn, and net social contributions fell by £5.1bn.
The ONS revised down UK GDP growth for 2025 from 1.4% to 1.3%.
The energy price cap is set to rise by 13% on 1 July 2026, to £1,862 a year for a typical bill.
Key figures
Andy Burnham, referenced as pledging to "lift the country back up"
Liz McKeown, Director of Economic Statistics at the ONS
Philip Shaw, economist at Investec
Rob Wood, chief UK economist at Pantheon
Jonathan Raymond, investment manager at Quilter Cheviot
Adam Scorer, chief executive at National Energy Action
Sources: The Guardian
