Families across Britain are continuing to pay a heavy price for five years of rising living costs, with new research revealing that the typical working age household is almost £3,000 worse off than it would have been without the prolonged inflation crisis.

The findings, published by the Resolution Foundation on Thursday 8 October, have prompted fresh calls for the UK Government to take immediate action on energy bills and household costs ahead of this month’s Budget.

The independent think tank estimates that typical household incomes in 2026 to 2027 will be £2,900 lower in real terms than they would have been if inflation had remained at its normal target of 2% over the past five years.

Its research paints a picture of a country still struggling with the consequences of successive economic shocks, including the pandemic, Russia’s invasion of Ukraine and the continuing conflict in the Middle East.

Since July 2021, prices have risen by almost 30%, equivalent to around thirteen years of normal inflation compressed into just five.

Energy costs have been particularly damaging, with rising gas and electricity bills feeding through into food prices, transport and the everyday expenses families cannot avoid.

The research also found that almost one in five households in the poorer half of the income distribution was behind on essential bills in March this year.

For communities across the Highlands and Islands, where heating costs, transport distances and dependence on private vehicles can place additional pressure on household budgets, the findings underline concerns about the affordability of everyday life.

The Resolution Foundation has called for any new government assistance to be targeted towards those experiencing the greatest financial difficulties, with household energy bills identified as an immediate priority.

The report has also drawn criticism from the SNP, which argues that Scotland’s considerable energy resources should translate into greater protection for households facing rising costs.

SNP MSP David Linden has challenged Prime Minister Andy Burnham over the Government’s approach, arguing that people struggling with bills cannot afford to wait years for improvements in their living standards.

Linden said:

“This is yet more misery for people living in our energy rich land, bills are through the roof yet we produce far more energy that we can hope to use.

“It doesn’t add up.

“Andy Burnham speaks of a vague plan in ten years’ time, people can’t wait a decade for Andy Burnham to act.

“It won’t surprise anyone in Scotland that this Labour UK Government is presiding over the worst fall in living standards in modern history, people only need to look at their energy bills or prices at the fuel pumps to see that.

“Independent Ireland in the EU just announced a massive cost of living support package, on top of the billions they’d already pumped into supporting their people and businesses, meanwhile Scotland waits for a Westminster system that is broken beyond repair.

“The age of Westminster is coming to an end, but through a fresh start with independence we will be free of this economic mess, ensuring Scotland’s vast resources work for the people who live here.”

The SNP has separately claimed that household bills have risen by around £3,000 during Labour’s period in government, although that political calculation is distinct from the Resolution Foundation’s estimate of income lost against a hypothetical period of normal inflation.

The research also examines the longer term damage to household finances, including growing energy debts and the particularly difficult circumstances facing families on lower incomes.

With the Chancellor preparing to deliver the UK Budget later this month, attention is turning to whether additional support will be announced and how quickly it could reach households.

For families struggling to balance heating, food, housing and transport costs, the figures describe a familiar reality in which money simply does not stretch as far as it once did.

And with another winter approaching, the question is not only how living standards can improve over the coming decade, but what help will be available to those who need it now.