30th October 2026
The Resolution Foundation has examined the Budget in considerable detail, looking beyond the Chancellor's announcements to assess who really benefits, who loses and what problems remain unresolved. Its 48-page report makes uncomfortable reading for a Government hoping to convince voters that household finances are improving.
Here is a shorter guide to its main findings for anyone who has not yet lost the will to live over the Budget!
If you thought you had heard enough about the Budget, you might want to take a deep breath. The Resolution Foundation has produced a 48-page assessment called Spread Thin, examining the Chancellor's decisions and what they mean for the economy, public services and household finances.
Fortunately, its central message can be summarised rather more quickly. The Government is trying to do too many things with too little money, while households are being asked to endure another period of squeezed living standards.
The Foundation's assessment is particularly interesting because it looks beyond the announcements and examines who actually benefits, who pays and what has been left unresolved.
Its verdict is not particularly encouraging.
A Budget that played safe
The Foundation describes the Budget as a remarkably modest response to the challenges facing the country.
The economic outlook has deteriorated following the international energy shock associated with the conflict in the Middle East. Inflation is expected to remain higher for longer, economic growth is weaker and government borrowing has become more expensive.
Yet the Chancellor largely chose to avoid major decisions.
The Foundation calculates that the combined value of the Budget's giveaways and measures taking money back amounts to approximately £7 billion. That is considerably smaller than the average of £72 billion associated with the previous two Budgets.
In other words, this was not a major attempt to reshape the economy. It was an attempt to manage immediate pressures without upsetting too many people.
The problem is that those pressures are not going away.
The growing cost of government debt
One of the most important findings concerns the amount Britain now spends simply paying interest on its existing debt.
Government borrowing costs have increased as international interest rates have risen. The Foundation estimates that the additional pressure will eventually add around £13 billion to the annual debt interest bill.
By 2029-30, government debt interest payments are forecast to reach £147 billion.
That is an extraordinary amount of money. It is also more than the combined expected spending on Universal Credit, Housing Benefit and Child Benefit.
Money spent servicing debt cannot be spent on hospitals, schools, roads, defence or other public services.
This is one of the reasons the Chancellor has limited room for manoeuvre. Even relatively modest changes in borrowing costs can consume billions of pounds that might otherwise be available for other priorities.
Household incomes: a lost decade?
Perhaps the most worrying part of the report concerns ordinary household living standards.
The Foundation expects inflation to peak at around 3.8 per cent in early 2027, although it warns that subsequent energy price movements could push it above 4 per cent.
The cumulative increase in consumer prices between 2025 and 2030 is forecast to be around 16 per cent.
Wages are unlikely to keep pace. The Office for Budget Responsibility expects average real earnings to show virtually no growth in 2027 and 2028.
The Foundation estimates that real household disposable income per person will increase by just 1.4 per cent over the entire 2020s. That is equivalent to approximately £400 over the decade.
It would be the weakest decade for household income growth on record.
This helps explain why many people feel that economic recovery figures do not reflect their own experiences. The economy can grow while families still feel poorer after paying their bills.
Energy help that misses some of those most in need
Energy bills are another major concern.
The typical dual-fuel household bill is forecast to reach £2,192 in January 2027, an increase of more than £600 compared with a year earlier on a consistent basis.
The Chancellor's response includes a £100 Household Energy Payment for eligible homes in Council Tax bands A to D in England, alongside an extension of the temporary electricity VAT reduction.
The Foundation questions whether this is the best way to distribute limited public money.
Its calculations suggest that the poorest half of households will receive an average benefit of £145 from the cost-of-living measures, compared with £130 for the better-off half.
That is a difference of just £15.
The report argues that the money would have been better concentrated on fewer households in greatest need, rather than spread across millions of properties.
There is also a potentially unwelcome consequence of abolishing gas standing charges. The charge will be transferred into higher unit prices.
Although around 13.3 million households could benefit, approximately 9.9 million are expected to lose an average of £61 a year.
Larger families, which tend to consume more energy, are particularly likely to be disadvantaged.
This is an important distinction. A policy can be presented as making the system fairer while leaving some households worse off.
Renters and housing: another missed opportunity
The Foundation is particularly critical of the Government's decision to leave Local Housing Allowance frozen.
This is the assistance that helps people on low incomes meet private rental costs.
Since the allowance was last increased, average private rents have risen by 23 per cent. More than 900,000 low-income private renting households now face rents higher than the support available to them.
The gap is becoming increasingly difficult to bridge.
The Government has instead placed greater emphasis on helping some renters become homeowners through its proposed Your First Home scheme.
The Foundation welcomes the initiative but questions who will benefit. It estimates that 76 per cent of private renter households with sufficient resources to access the scheme are in the upper half of the income distribution.
That raises a familiar problem: schemes designed to help people get on the housing ladder may be least accessible to those struggling most with housing costs.
Public services face another squeeze
The Budget also has implications for public services.
Health, education and defence receive protection, but other departments face much tighter financial constraints.
The Foundation warns that, if existing spending plans are maintained, the resources available for unprotected services could fall from 5.4 per cent of GDP this year to 4.7 per cent by 2031-32.
Those services include justice, local government and jobcentres.
For Scotland, and particularly councils such as Highland, this is worth watching. Local authorities already face difficult choices over social care, roads, schools, housing and other essential services.
Even where cash budgets appear to increase, inflation can reduce what that money actually buys.
The Foundation's wider point is that protecting some departments does not remove the financial pressure. It transfers more of it to those left outside the protected group.
Taxation: reform postponed again
The Foundation also believes the Chancellor missed an opportunity to undertake more fundamental tax reform.
There are some changes it welcomes. Tax on savings and rental income is being brought closer to the rates paid on employment income, while additional measures to tackle tax avoidance and unpaid tax are expected to raise more than £3 billion annually by 2030-31.
Banks will also face a temporary additional tax.
However, the Foundation argues that the Government has concentrated on relatively small adjustments rather than addressing the structural weaknesses of the British tax system.
It highlights the continuing complexity surrounding income tax, property taxation, business rates and capital gains tax.
The problem is that the overall tax burden is still heading towards record levels, making it increasingly important to ensure that the system is fair, understandable and does not discourage investment.
Growth is the long-term answer
There are some positive announcements.
The Chancellor has increased the capacity of the National Wealth Fund by £15.4 billion and the British Business Bank by £5 billion by 2031-32.
Together, these represent an additional £20.4 billion intended to support investment, businesses and economic development.
The Foundation welcomes this direction, alongside greater efforts to devolve economic decision-making.
But investment takes time to produce results. It cannot immediately solve the problems facing families, businesses or public services.
The report also questions whether the Government has done enough to protect longer-term investment in infrastructure and public assets.
The Chancellor has less room for manoeuvre
Perhaps the most important financial warning concerns the Government's remaining safety margin, known as fiscal headroom.
This is effectively the financial cushion available before the Chancellor risks breaking his own borrowing rules.
The Foundation calculates that this has fallen to £14.5 billion, compared with £23.6 billion under the previous forecast.
That leaves considerably less protection against another economic shock, higher interest rates or weaker growth.
The Chancellor appears to have decided that using some of this financial cushion now is preferable to building it up for future difficulties.
The Foundation questions whether that is a sensible gamble when the international economic outlook remains so uncertain.
What does it all mean?
The Resolution Foundation is not saying that everything in the Budget was wrong. It welcomes several measures, including additional business investment, some changes to taxation and attempts to ease energy costs.
But its overall assessment is that the Government has spread its resources too thinly.
Too many households receive relatively small amounts of assistance when those in greatest need require considerably more. Renters have been left with a growing gap between housing costs and available support. Public services face difficult years ahead, while the Government has postponed several major decisions.
For Scotland, the implications extend beyond the headline figures. The £100 energy payment announced for England is something the Scottish Government says it will seek to replicate, while the wider pressures on local government and public services will feed into future Scottish budget decisions.
The central problem is that Britain has an economy struggling to generate sufficient growth, a government spending enormous sums servicing debt and households whose incomes are failing to keep pace with living costs.
The Foundation's warning is particularly relevant to anyone hoping that the Budget marked the beginning of a sustained improvement in living standards.
It does not see that happening.
The underlying message of Spread Thin is that the Government has managed the immediate financial pressures but has not yet explained convincingly how Britain will pay for the services, investment and improvements in living standards that people expect.
There will be another Spending Review, further economic forecasts and more difficult decisions. But postponing those decisions does not make them disappear.
And that, perhaps, is the most important conclusion from the Foundation's 48-page examination of the Budget.
Resolution Foundation, October 2026, Spread Thin
Analysing the Autumn 2026 Budget. The figures and assessments above reflect the Foundation's analysis and should be read as its interpretation of the Budget, rather than government policy statements.
Spread Thin
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