Budget 2023: Who are the winners and losers? How three real households are affected
No matter what’s going on in your life, something in today’s financial statement from Jeremy Hunt will have a real impact on how much money – if anything – is left for you each month to spend on the things you want.
Sky News has analysed the real budgets of three different households to see whether they end up better or worse off.
Linda is going to be better off overall, thanks in part to the continuation of the energy bill price cap, although it might not feel like that, as the government has not extended the Energy Bills Support Scheme.
We’ve not included that in our calculations as it was a planned change rather than anything that came out of today’s announcements.
“We were really relying on that £67 payment, which we’re going to be losing. It’s a lot of money. The cap is good but they’re taking it out with the other hand. I can’t see how I’m going to be better off at all really. I’m gutted,” she told Sky News.
Click here for our budget calculator to see if you are better or worse off
Linda receives a private pension and a Personal Independence Payment (PIP) to help with health issues that forced her to take early retirement in 2017, aged 55.
Linda’s husband Wayne works full-time for an electrical engineering company, and they also receive rent from Linda’s 38-year-old son Anthony, who moved back in last year due to the rising cost of living. Linda also cares for her grandson Jamie for two days in the week, to help out with childcare costs.
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The new energy cap, Linda’s biggest saving, helps all households. When the government first introduced the Energy Price Guarantee it said that at this point it would rise from £2,500 to £3,000, for a typical annual bill, to ease pressure on public funds. It’s now set to stay at £2,500.
Linda is benefiting from an uplift in her disability support payments, however, adding to extra support received last year.
Frozen tax thresholds mean that Linda’s husband will effectively pay an extra £170 in tax next year. As his salary rises with inflation, the amount he can take home before paying tax does not. More on that later on.
Mike ends up worse off overall. He doesn’t mind so much as he’s in a comfortable situation, but was hoping to hear more support for those struggling.
“My concern is not for myself, I’m comfortably off. If fuel bills stay as they are I can survive, if they go up I can take the hit a little bit. People here [in Burnley] on minimum wage can’t afford to heat their homes or feed their kids.
“I was hoping for more support for those people rather than myself. I will rise over the bumps and I have a retirement coming up in a few years.”
Mike owns his own home and is the landlord for two others. He’s comfortable, but that doesn’t mean he’s immune from rising costs.
“Our day-to-day costs have doubled in the last 12 months, fuel costs have gone up 50%. And Liz Truss’s intervention cost me about £60,000 in lost pension pot,” he said.
Like Linda, he benefits from the energy price cap, but he loses out more from the tax threshold freeze. It will cost him more than £300 in real terms over the next 12 months.
Why is the tax threshold freeze so significant? As inflation rises so, typically, do wages. But in real terms, the value of money becomes less.
£10,000 will buy you about 10% less stuff than it did last year, for example.
In the UK you can earn £12,570 without paying tax. Typically that number, and the number at which you start paying a higher rate of tax (£50,270) rise each year to account for the fact that the money is worth less.
They haven’t this year and that affects all taxpayers, but could cost thousands for higher earners. It’s effectively a stealth tax.
Mike’s main concerns around the budget, however, are for those on lower incomes in his area, who he’s seen struggling to pay for the basics or even to feed their children.
“The stabilisation of the tax rate will cost me a bit of money, but I can tighten my belt a bit. People around here like Lianne don’t have more belt to tighten.”
Lianne will end up better off than last year, mainly thanks to the fuel duty freeze. Her husband Damian is also self-employed, he has a removals company so spends a lot on diesel. Once more though, it doesn’t feel like things are getting any easier.
“It’s really testing times, especially being self-employed. I feel we’re always the ones left behind. You’re trying to do well for yourselves but you’re backpedalling all the time,” she told Sky News.
“The government needs to step up and help the working person. Costs are going up and up and up across the board and they make it sound like – because they’re keeping it at a level rate, not increasing it anymore – they’re doing us a favour, but they’re not. People are struggling.”
Lianne and Damian have a four-year-old daughter who started school this year. They won’t benefit from today’s announcement about childcare support.
Before she started school they paid £100 for two days of childcare a week. Lianne had to go part-time with her work because it was unaffordable to pay for more.
What the family lose from the tax threshold freeze is offset by what they gain from an uplift in child benefit, energy prices and fuel prices.
Fuel duty is the amount of tax that the government charges drivers when they buy petrol. When petrol prices started rising the government lowered the amount of tax it gets, per litre, but planned to raise it back again.
The government announced today that they will no longer do that, which is especially important to Lianne’s husband Damian with his driving-intensive job. Raising the duty as planned would have cost the family over £200 more a year.
Prices are still significantly higher than they were before Russia’s invasion of Ukraine, however.
“People are already at breaking point. For people on the borderline, if things get any worse I dread to think what’s to come,” Lianne added.
Follow more of Sky News’s reaction to the budget on our live page.
The Data and Forensics team is a multi-skilled unit dedicated to providing transparent journalism from Sky News. We gather, analyse and visualise data to tell data-driven stories. We combine traditional reporting skills with advanced analysis of satellite images, social media and other open source information. Through multimedia storytelling we aim to better explain the world while also showing how our journalism is done.
Retail sales rose a surprising amount in July, as good weather and the Women’s Euros led people to part with their cash, official figures show.
The amount of spending rose 0.6% in July, according to figures from the Office for National Statistics (ONS), far above the 0.2% rise anticipated by economists polled by Reuters.
In particular, clothing and footwear stores, as well as online shopping, experienced strong growth.
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When looked at on a three-month basis, the numbers are weaker, with a 0.6% fall in sales up to July due in part to downward revisions in June.
Spending has declined since March, when supermarkets, sports shops, and household goods saw strong sales at the beginning of the year as warm and sunny weather pushed summer purchases earlier. Though compared to a year ago, sales are up 1.1%.
Fans gather during a Homecoming Victory Parade in London after England’s win in the final of the Women’s Euros. Pic: PA
Retail sales figures are significant as they measure household consumption, the largest expenditure in the UK economy.
Growing retail sales can mean economic growth, which the government has repeatedly said is its top priority.
A problem with the figures
These figures were originally due to be published in August but were delayed by two weeks so the ONS could carry out “quality assurance” checks.
Following the checks, the statistics body found a “problem”, which meant it had to correct seasonally adjusted figures.
It hasn’t been the only question mark over the reliability of ONS figures.
In March, UK trade figures were delayed due to errors from 2023, and the office continues to advise caution in interpreting changes in the monthly unemployment rate due to concerns over data reliability.
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UK growth slowed amid rising costs in June.
As a result of the latest error, previously monthly figures overstated the monthly volatility in the first five months of 2025, the ONS’s director general of economic statistics, James Benford, said.
Mr Benford apologised for the release delay and for the errors.
What could it mean?
It could mean retrospective changes to the UK economic growth rate, according to Rob Wood, the chief UK economist at Pantheon Macroeconomics.
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April’s economic growth rate will be revised down, and May’s will be moved up as a result, Mr Wood said.
There will be no impact on the Bank of England’s interest rate decision, he added.
A greater proportion of electric cars were sold last month than at any point this year, industry data shows.
More than a quarter (26.5%) of cars sold in August were electric vehicles (EVs), according to figures from motor lobby group the Society for Motor Manufacturers and Traders (SMMT).
It’s the largest amount of sales since December 2024 and comes as the government introduced financial incentives to help drivers make the move to zero tailpipe emission cars.
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The full suite of grants were not available during the month, however, with a further 35 models eligible for £1,500 off early in September.
Throughout August more models became eligible for price reductions, meaning more consumers could be tempted to purchase an EV in September.
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New EV grants to drive sales came into effect in July
The increased percentage of EV sales came despite an overall 2% drop in buying, compared to a year earlier, in what is typically the quietest month for car purchases.
What are the rules?
The numbers suggest the car industry could be on course to meet the government’s zero-emission vehicle (ZEV) mandate, the thinktank Energy & Climate Intelligence Unit (ECIU) has said.
It stipulates that new petrol and diesel cars may not be sold from 2030.
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Amid pressure from industry, the government altered the mandate in April to allow for hybrid vehicles, which are powered by both fuel and a battery, to be sold until 2035.
Sales of new petrol and diesel vans are also permitted until 2035.
Until then, 28% of cars sold must be electric this year, with the share rising to 33% in 2026, 38% in 2027 and 66% in 2029, the final year before the new combustion engine ban.
Manufacturers face fines for not meeting the targets.
Last year, the objective of making 22% of all car sales purely EVs was surpassed, with EVs comprising 24.3% of the total sold in 2024.
Why?
The increased portion of EV sales can be attributed to increased model choice and discounting, on top of the government reductions, the SMMT said.
Savings from running an electric car are also enticing motorists, the ECIU said. “Demand for used EVs is already surging because they can offer £1,600 a year in savings in owning and running costs.”
“This matters for regular families as the pipeline of second-hand EVs is dependent on new car sales, which hit the used market after around three to four years.
Businesses have cut jobs at the fastest pace in almost four years, according to a closely-watched Bank of England survey which also paints a worrying picture for employment and wage growth ahead.
Its Decision Maker Panel (DMP) data, taken from chief financial officers across 2,000 companies, showed employment levels over the three months to August were 0.5% lower than in the same period a year earlier.
It amounted to the worst decline since autumn 2021 as firms grappled with the implementation of budget measures in the spring that raised their national insurance contributions and minimum wage levels, along with business rates for many.
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The start of April also witnessed the escalation in Donald Trump’s global trade war which further damaged sentiment, especially among exporters to the United States.
The survey showed no improvement in hiring intentions in the tough economy, with companies expecting to reduce employment levels by 0.5% over the coming year.
That was the weakest outlook projection since October 2020.
At the same time, the panel also showed that participants planned to raise their own prices by 3.8% over the next 12 months. That is in line with the current rate of inflation.
The news on wages was no better as the central forecast was for an average rise of 3.6% – down from the 4.6% seen over the past 12 months.
If borne out, it would mean private sector wages rising below the rate of inflation – erasing household and business spending power.
The Bank of England has been relying on data such as the DMP amid a lack of confidence in official employment figures produced by the Office for National Statistics due to low response rates.
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August: Tax rises playing ’50:50′ role in rising inflation
Bank governor Andrew Bailey told a committee of MPs on Wednesday that he was now less sure over the pace of interest rate cuts ahead owing to stubborn inflation in the economy.
The consumer prices index measure is expected to peak at 4% next month – double the Bank’s target rate – from the current level.
Higher interest rates only add to company costs and make them less likely to borrow for investment purposes.
At the same time, employers are fearful that the coming budget, set for late November, may contain no relief.
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Why aren’t we hearing about the budget ‘black hole’?
Sky News revealed on Thursday how the head of the banking sector’s main lobby group had written to the chancellor to warn that any additional levy on bank profits, as suggested by a think-tank last week, would only damage her search for growth.
Rachel Reeves is believed to be facing a black hole in the public finances amounting to £20bn-£40bn.
Tax rises are believed to be inevitable, given her commitment to fiscal rules concerning borrowing by the end of the parliament.
Heightened costs associated with servicing such debts following recent bond sell-offs across Western economies have made more borrowing even less palatable.
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Why did UK debt just get more expensive?
Ms Reeves is expected to raise some form of wealth tax, while other speculation has included a shake-up of council tax.
She has consistently committed not to target working people but the Bank of England data, and official ONS figures, would suggest that businesses have responded to 2024 budget measures by cutting jobs since April, with hospitality and retail among the worst hit.
Commenting on the data, Rob Wood, chief UK economist at Pantheon Macroeconomics, said: “The DMP survey shows stubborn wage and price pressures despite falling employment, continuing to suggest that structural economic changes and supply weakness are keeping inflation high.
“The MPC [monetary policy committee of the Bank of England] will have to be cautious, so we remain comfortable assuming no more rate cuts this year.”
“That said, the increasing signs of labour market weakness suggest dovish risks,” he concluded.
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