Measures to help ease cost of living ‘likely to be dwarfed’ by income tax threshold freeze
We respond to the Autumn Budget 2025.
Posted November 26, 2025
Steve Vaid, our Chief Executive, responded to the Budget, set out by the Chancellor:
"The Chancellor promised to use this Budget to tackle the cost of living. On some measures, she delivered: lifting the two-child benefit limit, which should see around 500,000 families get a boost in their incomes of around £5,000, plus raising the minimum wage and expanding the Help to Save scheme.
Moving some costs off energy bills is the right thing to do and is predicted to reduce bills by around £150 a year next year, but there is still no clear, long-term plan to make energy bills affordable for people on lower incomes. Without this, scrapping the ECO scheme risks undermining longer-term action on energy efficiency.
But these positive measures are likely to be dwarfed by the impact of the freeze on income tax thresholds, which will directly hit people’s pay packets. Incomes not stretching far enough to cover essential costs is a key driver of debt problems, and this move risks pushing more households into difficulty.
Nearly half of the people we help at our National Debtline service have a negative budget, where essential costs exceed income. While the Budget offers some relief for those on the lowest incomes in the short-term, it falls short of tackling the root causes of financial hardship – which will leave many wondering why more wasn’t done to ease the cost-of-living strain."
