How the budget could make things worse for millions of working people with extreme money troubles

Published

8 months ago

October 29, 2024

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Lowri Williams is struggling to cover her basic expenses. Earning a low income with very little support, she says she feels like she’s “living hand-to-mouth” and barely getting by.

She’s one of a large group of people in low-income households who are caught in a precarious position, earning too little to comfortably support themselves, but too much to qualify for significant financial help.

For people like Lowri, working more or earning a higher income could mean losing vital support like Universal Credit, leaving them no better off and in some cases even worse off.

Higher tax bills for the lowest paid

Lowri’s salary is not high enough to pay tax. But there’s a wider group of low-income earners who are facing a heavy tax burden.

Sky News analysis has found that in the last three years, working people in the bottom 25% of earners have effectively had a 60% tax hike.

This is due to the freeze on personal allowances, introduced in 2021 and scheduled to end in 2028. For each year the freeze is enacted, earners effectively see their tax rates rise in real terms as a higher proportion of their income becomes taxable.

Labour may extend the freeze in their budget this week. If the chancellor proceeds with the plan, around 400,000 people who are currently exempt will find themselves paying income tax, and many current taxpayers will pay higher rates.

On top of this, low to middle-income households are seeing significant stagnation in how much their income is going up, according to analysis of Department for Work and Pensions (DWP) data by the Resolution Foundation.

This finding is part of an upcoming report in November, obtained by Sky News, which will delve deeper into the financial pressures these households face.

Between the mid-1990s and early 2000s, low to middle-income households experienced an almost 50% rise in income. But in the last decade, that growth has slowed dramatically to just 11%.

Fluctuating earnings and a squeeze on benefits

The government is also reportedly considering restricting sickness benefits, a move which may exacerbate the issue.

“Economic vulnerability and insecurity are particularly high among people with ill health or disabilities,” said Alfie Stirling, director of insight and policy at the Joseph Rowntree Foundation.

“Any policy that reduces their support, or limits access to it, will likely worsen hardship and increase the number of people at risk,” he added.

Low income families in these situations can receive state support like Universal Credit to supplement their income.

Universal Credit, first introduced in 2013, combines several state-funded benefits, including housing support, child tax credits, and income support, into one payment. It provides support to households both in and out of work.

Around 2.5 million people in work receive this support, but some, like Lowri, a part-time charity worker, miss out at times due to fluctuating monthly earnings.

Universal Credit is reduced by 55p for every £1 earned, a calculation known as the taper rate. Some people receive an allowance before this reduction, depending on their circumstances.

Lowri, who is impacted by the taper rate, explained: “If you earn over the limit, you lose out immediately. Not only do you lose Universal Credit, but also your council tax benefit, which is another £150 a month.

“So, while you might earn £50 more, you could end up £100 worse off.”

“Every penny you have coming in is paying just bills,” she said.

Finding ways to save

Below is Lowri’s household expenditure for some essential bills.

While she’s able to receive UC, she’s eligible for social tariffs, which are a discounted package for household bills, which could help her save.

This could amount to a saving of nearly £70 for Lowri’s mobile and broadband budget, according to analysis by Nous, an AI-powered bill-tracking tool.

With social tariffs in place, her water bill could be cut in half.

The National Living Wage

While Lowri’s income means she doesn’t pay tax, people on the National Living Wage (NLW), £11.44 per hour (£22,308 annually), who earn more than her, are heavily affected by tax and benefits decisions made by the Conservative government, which Labour are reportedly proposing to extend.

At the budget in March, the NLW increased by 10%.

The chancellor may announce a further hike in the NLW at this week’s budget, which sounds like good news.

But Lalitha Try, economist at the Resolution Foundation says: “Our research shows that the introduction and ramping up of the minimum wage has delivered a major living standards boost to lower income families over the past 25 years.

“But it’s important to recognise that there are limits to what it can achieve. For workers on Universal Credit, over half of the wage gains will be clawed back through lower benefit entitlement.

And the minimum wage can’t help those who may earn more than the legal minimum but struggle with low hours or high housing costs. Other policies are needed to solve those challenges.”

Losing access to support like Universal Credit could also mean people no longer qualify for things like social tariffs and free school meals.

On top of that, the freezing of the personal allowance thresholds which heavily affects the lowest 25% of earners in the UK has also had a significant impact on people earning the NLW.

The amount of tax that someone working full time on the living wage will pay annually in 2024/2025 is over £1,000 more in real terms than it was in 2019/2020.

That’s a lot of money for someone earning just over £22,000 per year.

It means their effective tax rate has almost doubled, from 4.4% to 8.7%, in five years.

These are only a few examples of how an increase in NLW means they have less money in their pockets.

Two salaries and still struggling

It’s a similar story for people on what is meant to be a more comfortable income.

Chris and Tracey Matthewman, who live with their three daughters in Basildon, Essex, are among the tens of millions of people living below the Minimum Income Standard (MIS).

This is the amount the Joseph Rowntree Foundation defines as necessary for an acceptable standard of living.

It goes beyond just food, clothing, and shelter; it includes the ability to participate in society, such as being able to socialise and having access to technology.

In 2024, the MIS was £28,000 for a single person and £69,400 for a couple with two children.

Tracey teaches in a primary school and Chris looks after the fleet of vehicles his company uses.

The Matthewman household income is below the Minimum Income Standard (MIS) for a family of their size, a little over £80,000 in total.

After tax, their combined household income is around £4,000 a month. A lot of that gets spent on energy bills and council tax, not to mention other essentials.

Chris is clearly worried about how to keep the family afloat. When I visited his home he repeatedly showed me his detailed spreadsheet which he uses to meticulously track his family’s expenses.

Chris says: “It’s frustrating. We have to accept living paycheque to paycheque, just surviving month to month.”

And Tracey had this message for Rachel Reeves, the chancellor, ahead of Labour’s budget: “They need to remember that there are people living in this country who don’t receive any benefits and are still struggling.”

“We’re in that demographic that ends up paying more – more national insurance, more tax. We keep tightening up, but we’re not eligible for any benefits. That’s tough.”

Additional reporting: Daniel Dunford, Senior Data Journalist

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.

UK

Why did Ballymena become the latest site of anti-immigration riots?

Published

9 hours ago

June 14, 2025

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Why did Ballymena become the latest site of anti-immigration riots?

There have now been five consecutive nights of ongoing violence and disorder on the streets of Northern Ireland, with Ballymena at the focus of the unrest following a serious sexual assault on a teenage girl in the town on 7 June.

Two 14-year-old boys were arrested and charged after the incident, and police in Northern Ireland said the pair used a Romanian interpreter to plead not guilty in court.

After that, calls for “peaceful protest” from the victim’s father were amplified online. Those protests took on an anti-immigration angle and erupted into riots and clashes with police.

Analysis of social media messaging has shown there were already rising tensions in the town before the latest incident, following a decade of rapid demographic change.

Before the protests

On 30 May, eight days before the 7 June incident in the Clonavon Terrace area that triggered this week’s violence, police released a statement regarding a different sexual assault in Ballymena, this time of a 13-year-old girl.

The offence was alleged to have taken place on a public footpath near the Ballykeel housing estates, during daylight hours on Saturday 24 May.

Local media at the time reported the suspect as having “dark-coloured skin, dark brown eyes, and speaking in a foreign language”.

On 31 May, a far-right news aggregator on messaging platform Telegram was already sharing information related to this incident, saying “Ballymena said to be at boiling point”.

But the online chatter remained relatively contained until after the police announcement on the evening of Sunday 8 June, that they had arrested the two 14-year-olds charged with the Clonavon Terrace incident.

Analysis of posts on X, formerly known as Twitter, shows that there were 114 mentions of Ballymena per day from 3-7 June.

It was mentioned 142 times on 8 June, then surged up to 10,300 on 9 June and 78,300 the following day. The majority of posts originated outside of Northern Ireland.

Rapid demographic change

The descriptions of the alleged perpetrators of the two incidents have contributed to the anti-immigrant sentiment of the violence.

Sky News has seen Union flags and signs saying “British household” or “Locals live here” left outside homes of people keen to avoid being targeted, and has also spoken to Bulgarian nationals in Ballymena who say that they are “terrified” and “scared to get out of the house”.

Speaking in the House of Commons, Jim Allister, MP for North Antrim, which includes Ballymena, said he was “appalled” by the violence. “However”, he said, “the government must be aware of underlying tensions produced by uncontrolled and often undocumented immigration.

“None of that excuses violence, but it is a matter of concern to many.”

Analysis of census data shows there has been rapid demographic change in the town since 2011. No other part of Northern Ireland has seen a bigger increase in people who don’t speak English/Irish as a first language.

At the time of the 2021 census, three in 10 residents of central Ballymena said their first language was something other than English or Irish.

One in eight listed Romanian, with a similar number listing other Eastern European languages like Bulgarian, Polish and Slovak.

That figure is almost seven times higher than the average across Northern Ireland, and amounts to a trebling over the course of the decade.

Almost three-quarters of the total foreign-born population of central Ballymena arrived in the country since 2011.

The average is significantly lower for Northern Ireland as a whole, and England and Wales, where the rate of change has been more gradual.

Of 621 primary schools in Northern Ireland where data is available, Ballymena Primary and Harryville Primary, both in central Ballymena, had the 7th and 8th highest share of “newcomer pupils”.

“Newcomer” is the term used by the Northern Irish Department for Education to refer to pupils who don’t have satisfactory language skills to participate fully in the school curriculum.

How, and when, will the violence end?

Sky’s Connor Gillies, who has been in Ballymena reporting on the violence and talking to locals for the past few days, said on Wednesday that “the talk here is that this unrest is only just beginning,” adding that “it could go on for weeks”.

Meanwhile, locals have expressed that they don’t like the talk from police and politicians that taking to the streets following an alleged sex attack on a teenage girl equates to them being “racist thugs”.

Police have responded to rioters’ petrol bombs and bricks with rubber bullets and water cannon onslaughts of their own. There have been tens of arrests, as well as injuries to more than 50 police officers since Monday evening.

Violence and disorder in Ballymena raged across Monday, Tuesday, and Wednesday, appearing to have largely abated in the town by Thursday. However, the unrest has spread to other areas including Larne, Coleraine, Portadown and Belfast.

A senior police officer insisted to Sky News that he did have “a grip” on the unravelling situation when questioned by Sky News, but officers from Scotland, Wales and England have been sent to bolster the forces of their Northern Irish colleagues.

Anti-migrant rhetoric

From 7-12 June, 39,000 Ballymena-related posts on X mentioned “migrants”, with around 95% of them deemed to be negative by social media analysis tool Talkwalker.

Well-known far-right activist Tommy Robinson, who thanked X-owner Elon Musk for his support when he was released from prison four months early on 27 May, was the most influential poster.

His 14 X posts about Ballymena between 7-12 June reached an average of 1.3 million accounts each.

UK

Royals to pay tribute to Air India crash victims at Trooping the Colour

Published

9 hours ago

June 14, 2025

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Royals to pay tribute to Air India crash victims at Trooping the Colour

Members of the Royal Family will wear black armbands “as a mark of respect” to those involved in the Air India crash at tomorrow’s Trooping the Colour parade.

There will also be a minute’s silence at the event following Thursday’s crash in the city of Ahmedabad, western India.

Following the crash, which killed at least 241 people, the King asked for some amendments to be made to his traditional birthday parade on Saturday.

A palace spokesperson said Charles wanted the alterations “as a mark of respect for the lives lost, the families in mourning and all the communities affected by this awful tragedy”.

The minute’s silence will be held after the King inspects the guard on Horse Guards Parade. It will be signalled in the traditional way by a Last Post and Reveille.

Charles and the senior royals riding in the ceremony will wear black armbands, as will postilions, coachmen and coachwomen from the Royal Mews.

They will not be worn by family members who are wearing civilian clothes.

The King said he and the Queen were “desperately shocked by the terrible events in Ahmedabad” after the crash on Thursday.

A statement from Buckingham Palace continued: “Our special prayers and deepest possible sympathy are with the families and friends of all those affected by this appallingly tragic incident across so many nations, as they await news of their loved ones.

“I would like to pay a particular tribute to the heroic efforts of the emergency services and all those providing help and support at this most heartbreaking and traumatic time.”

Union flags have today been flown at half-mast on all royal residences and government buildings.

Alterations have been made to the Trooping event before.

In 2017, Queen Elizabeth requested a minute’s silence to be held during the parade as a mark of respect to those who died in the Grenfell Tower fire three days earlier.

This year, the Coldstream Guards will Troop their Colour and display their banner flag as they mark their 375th anniversary.

A decade later, in 1660, the regiment marched down from Berwick to help restore the monarchy, dissolve Parliament and bring King Charles II back to the throne.

More than 1,000 soldiers and 200 horses from the Household Division will be involved in the spectacular display, with members of the Royal Family also taking part on horseback or travelling along the Mall in carriages.

Last year, the King joined Camilla in a carriage, rather than riding, after being diagnosed with cancer months earlier in February.

It’s been reported he will do the same this year, but this has not been confirmed by the palace.

The event will finish with the traditional balcony moment, as members of the Royal Family gather to watch a flypast of military aircraft, including The Red Arrows.

UK

David Beckham says knighthood ‘truly humbling’ – as rock star and acting great also honoured

Published

12 hours ago

June 14, 2025

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David Beckham says knighthood 'truly humbling' - as rock star and acting great also honoured

David Beckham has called it “truly humbling” and an “emotional moment” to be made a knight in the King’s Birthday Honours.

The former England captain receives the honour alongside The Who frontman Roger Daltrey and Oscar-winning actor Gary Oldman.

Singer and actress Elaine Paige, novelist Pat Baker, and former defence secretary Penny Mordaunt have been awarded damehoods.

Meanwhile, Strictly Come Dancing hosts Tess Daley and Claudia Winkleman, as well as darts stars Luke Littler and Luke Humphries, will all get MBEs.

Beckham was made an OBE in 2003, but now finally becomes Sir David after being in the running for many years. He gets the honour for his services to sport and charity.

Sir David was said to be close to a knighthood in 2014, but reportedly lost out after HM Customs and Revenue flagged his involvement in an alleged tax avoidance scheme.

“Growing up in east London with parents and grandparents who were so patriotic and proud to be British, I never could have imagined I would receive such a truly humbling honour,” he told PA news agency.

“To have played for and captained my country was the greatest privilege of my career, and literally a boyhood dream come true,” added the former Manchester United and Real Madrid star.

Sir David, who recently turned 50, was seen chatting to the King the day before his honour was announced as part of his role as an ambassador for the monarch’s foundation.

He said he’d been fortunate to “represent Britain around the world and work with incredible organisations that are supporting communities in need and inspiring the next generation”.

Sir David added: “I’m so lucky to be able to do the work that I do and I’m grateful to be recognised for work that gives me so much fulfilment.

“It will take a little while for the news to sink in but I’m immensely proud and it’s such an emotional moment for me to share with my family.”

On the music front, The Who’s singer got a knighthood at age 81.

Sir Roger – known for hits such as My Generation and Pinball Wizard – led the Teenage Cancer Trust at Royal Albert Hall concert series for more than two decades.

“It’s kind of weird, but I am deeply honoured to get this, especially for the charity for the Teenage Cancer Trust, and I accept it on their behalf really, because this honour is really for all unsung heroes,” said Sir Roger.

“It’s a dream come true for me, but it’s especially a dream because the charity means so much.”

TV presenter Tess Daly called her MBE “the greatest surprise of my life”.

“I don’t think I’ve come back down to earth yet,” she told PA. “I didn’t see it coming, and it almost didn’t happen because the letter went to the wrong address.

“And thank goodness someone very kind found me. And so by the time I got it, I only had, I think it was two or three days left to accept it.”

Her co-star on Strictly, Claudia Winkleman, said she was “incredibly grateful” to be recognised.

“I will buy a hat and am taking my mum [to receive the honour]. I am ridiculously lucky and will celebrate with Tess by doing a paso doble,” she said.

West End legend Elaine Page – who has starred in shows such as Cats and Evita – was also honoured for services to music and charity.

The singer said she was in “shock” at becoming a dame

“I’ve got all these different emotions coming at me all at once,” said the 77-year-old. I’m proud and I feel grateful and I’m thrilled and surprised, and so it’s been quite a lot to take in.”

Dame Elaine has roles at two charities – The Children’s Trust and The Dan Maskell Tennis Trust, which supports disabled tennis players.

She’s also presented a BBC radio show for more than 20 years.

More than 1,200 people from across the country were given honours in the latest list, including Sky Group chief executive Dana Strong – awarded a CBE for services to business and the media.

Eleven-year-old disability campaigner Carmela Chillery-Watson is the youngest to be recognised after helping raise more than £400,000 for Muscular Dystrophy UK.

The oldest is 106-year-old William Irwin, founder of the Coleraine Winemakers Club, who gets a BEM (British Empire Medal) for services to the community.

However, the top accolade has been awarded to sculptor Sir Antony Gormley, the man behind the Angel of the North, who is made Companion of Honour for services to art.

There can only be 65 companions at any one time.

Other notable names on the list include former defence secretary Penny Mordaunt – who famously had a prominent role holding a sword at the King’s coronation – and is now a dame; and former EastEnders actress Anita Dobson, who gets an OBE.