HENRY households to see over 15k hit in annual purchasing power by 2029 due to Budget measures
- IG carried out analysis of Budget impact for high and mid-high earners using latest HM Treasury data
- Research shows top earners (average income of £103,700) can expect reduction in annual purchasing power of £15,658 by 2029
- Mid-high earners (average income of £65,700) can expect reduction of £8,953
London, 15th December - HENRY households (“High Earners, Not Rich Yet”) are set to see an average real reduction in annual purchasing power of over £15,000 by 2029 as a result of the Chancellor’s Budget, according to new analysis from investment and trading platform IG.
IG analysed HM Treasury data1 assessing how tax freezes, welfare policies and public spending decisions will affect UK adults across all ten household-income deciles up to 2028/29, the final year of the current Spending Review period.
The analysis shows that adults in the ninth decile (average income £65,700) receive zero net support from the Budget, while those in the top decile (average income £103,700) face an average net annual income impact of –0.3%.
By contrast, the bottom decile (average income £13,100) receives an annual income boost of more than 7%, and those in the fifth decile (average £31,400) see an increase of over 2%.
When factoring in household inflation and fiscal drag resulting from frozen tax thresholds over the next three years2, ninth-decile earners face an average reduction in real purchasing power of £8,935 by 2029. For top-decile earners, the reduction is £15,658.
Chris Beauchamp, Chief Market Analyst at IG said: “While the Chancellor met her fiscal rules and avoided increases to income tax or national insurance, the combination of policy measures and frozen thresholds will have a disproportionately large effect on HENRY households.
“As the name suggests, many in these income bands carry high living costs and wouldn’t recognise themselves as ‘rich’. Once inflation and fiscal drag are factored in, the squeeze on real disposable income will feel significant, forcing some households to reassess spending, saving and long-term financial plans.
“In this environment, households in this bracket should be motivated to become more engaged with investing as they recognise that growing and protecting whatever wealth they can is increasingly crucial. However, there is also the risk that squeezed disposable incomes limit how much households can invest - something the government should consider as part of its drive to get more Brits investing.”
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-ENDS-
Notes to editors
About the data
Household inflation data for 9th and 10th income deciles taken from: Household Costs Indices for UK household groups: July to September 2025. Household inflation for higher earners is projected to follow Bank of England Monetary Policy Report CPI data over the next three years (at a relative rate -4ppts below CPI to reflect the current ratio), with a -8.6% compounded impact on purchasing power. RHDI figures in line with OBR Economic and fiscal outlook November 2025. Estimates for impact of fiscal drag for deciles 9 and 10 informed by pre-Budget analysis from Institute for Fiscal Studies and the Resolution Foundation.
| Decile 9 | Decile 10 | |
Household inflation (compounded): |
-8.6% |
-8.6% |
Fiscal drag (% reduction in income): |
-3.50% |
-4.50% |
RHDI (Real Household Disposable Income) impact: |
-1.50% |
-2.00% |
% decrease in purchasing power: |
-13.6% | -15.1% |
Average income: |
£65,700 |
£103,700 |
Total purchasing power reduction: |
-£8,935 |
-£15,658 |
For any press enquiries, please contact:
IG PR: jack.crone@ig.com or press@ig.com
Teamspirit PR: 07368825503 or IG@teamspirit.co.uk
About IG Group
IG Group (LSEG:IGG) provides online trading platforms and educational resources to empower ambitious clients around the globe. Headquartered in the UK, IG Group is a FTSE 250 company that offers clients access to c.19,000 financial markets worldwide
All trading involves risk.
The value of shares, ETFs and ETCs bought through a share dealing account, a stocks and shares ISA or a SIPP can fall as well as rise, which could mean getting back less than you originally put in. Past performance is no guarantee of future results.
Share dealing and IG Smart Portfolio accounts provided by IG Trading and Investments Ltd, CFD accounts provided by IG Markets Ltd, spread betting provided by IG Index Ltd.
IG is a trading name of IG Trading and Investments Ltd (a company registered in England and Wales under number 11628764), IG Markets Ltd (a company registered in England and Wales under number 04008957) and IG Index Ltd (a company registered in England and Wales under number 01190902). Registered address at Cannon Bridge House, 25 Dowgate Hill, London EC4R 2YA. IG Markets Ltd (Register number 195355), IG Trading and Investments Ltd (Register Number 944492) and IG Index Ltd (Register number 114059) are authorised and regulated by the Financial Conduct Authority.
1 HM Treasury: Impact on households: distributional analysis to accompany Budget 2025
2 See notes to editors section for details
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