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

Published

1 year 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.

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Resident doctor strikes: I don’t want people to suffer but we have to walk out again, says BMA chief

Published

13 mins ago

November 13, 2025

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Resident doctor strikes: I don't want people to suffer but we have to walk out again, says BMA chief

The British Medical Association (BMA) has defended a new round of resident doctor walkouts starting on Friday, insisting medics’ pay is still “way down” compared with 2008 and that the government has failed to finish “a journey” towards restoring it.

BMA chair Dr Tom Dolphin told Sky News the dispute remains rooted in years of pay erosion that have left resident doctors far behind other public sector workers.

“When we started the dispute, […] the lowest level of the resident doctors were being paid £14 an hour,” he said.

“There were some pay rises over the last couple of years that brought that partly back to the value it should be at, but not all the way.

“The secretary of state (Wes Streeting) himself called it a journey, implying there were further steps to come, but we haven’t seen that.”

When asked if the row ultimately “comes down to money”, he replied: “In the sense that the secretary of state doesn’t want to or isn’t able to fund the pay increases to match the value that we had in 2008.”

Dr Dolphin argued that while “the general worker in the economy as a whole” has seen pay catch up since the 2008 financial crash, “doctors are still way down”.

The government points out that its 29% settlement last year was one of the largest in the public sector and was intended to draw a line under two years of walkouts.

How much do resident doctors earn?

After the most recent pay awards, in 2025/26 a medic just out of university receives a basic salary of £38,831 and has estimated average earnings of £45,900 after factors like extra pay for unsociable hours are taken into account, according to medical think tank the Nuffield Trust.

That average figure rises to £54,400 by the second year and a more senior speciality registrar earns an average of £80,500.

The BMA says that when the dispute started, the most junior doctors were making around £14 per hour. That works out at £29,120 per year for a 40-hour week.

That’s very close to the earnings of a doctor fresh out of medical school in 2022/23 – £29,384, according to Full Fact.

But that’s over a 52-week year without taking into account paid holiday or unsociable hours.

But Dr Dolphin said the deal still fell short: “The gap was biggest for doctors and needed the biggest amount of restoration, and that’s what we got.”

He defended the BMA’s use of the Retail Price Index (RPI), a metric rejected by the Office for National Statistics, saying it “better reflects the costs people face”.

Should resident doctors get a pay rise? Have your say in the poll at the bottom of this story.

‘Who do you think is treating the patients?’

With Chancellor Rachel Reeves preparing her budget amid warnings of deep cuts, Dr Dolphin said the BMA is not demanding an immediate cash injection.

“We’re quite happy for that money to be deferred with some kind of multi-year pay deal so that we can end the dispute and avoid having further industrial action about pay for several years to come,” he said.

“Money spent in the NHS is returned to the economy. For every pound you spend, you get several pounds back.”

When pressed on whether the £1.7bn cost of previous strike action could have been better spent on treatment and technology for NHS cancer patients, he hit back: “Who do you think is treating the cancer patients? It’s the doctors.”

Strikes will cause disruption, union boss admits

Dr Dolphin rejected suggestions that the dispute could destabilise the government, calling the idea “implausible”.

He admitted prolonged strikes have tested public patience, but said the government had left doctors with no choice.

“A prolonged industrial dispute makes people annoyed with both sides,” he said. “It is vexing to us that we are still in this dispute.”

“I don’t want patients to suffer,” he added. “I accept that the strikes cause disruption… of course that’s upsetting for them. I completely get that. And I’m sorry that it’s happening.”

Business

Anglesey chosen as site for UK’s first small nuclear power station

Published

13 mins ago

November 13, 2025

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Anglesey chosen as site for UK's first small nuclear power station

Wylfa, on Anglesey, also known as Ynys Mon, has been chosen as the site for the UK’s first small modular reactor nuclear power station, the UK government has confirmed.

Officials estimate the site in north Wales will support hundreds of full-time jobs, as well as 3,000 jobs in the local economy at the height of construction.

Work on the site is due to commence in 2026 with an initial programme involving three reactors. The location has the capacity to accommodate as many as eight small modular power stations in the longer term.

Politics latest: Starmer denies authorising attack on Streeting

Sky News understands ministers weighed up Oldbury in Gloucestershire as a possible site before ultimately deciding on Anglesey.

The project will be run by the publicly owned company Great British Energy-Nuclear and is supported by a UK government investment of £2.5bn.

Rolls-Royce SMR is set to design the UK’s first small modular nuclear reactors (SMRs), pending final contracts, which are expected to be signed later this year.

Prime Minister Sir Keir Starmer said: “Britain was once a world-leader in nuclear power, but years of neglect and inertia has meant places like Anglesey have been let down and left behind.”

He added: “We’re using all the tools in our armoury – cutting red tape, changing planning laws, and backing growth – to deliver the country’s first SMR in North Wales.”

The site is projected to supply electricity for three million homes – more than twice the number of homes in Wales. It is hoped the Wylfa reactors will start supplying power to the grid from the mid-2030s.

Eluned Morgan, the first minister of Wales, said: “This is the moment Ynys Mon and the whole of Wales has been waiting for.”

She added: “New nuclear is a step into the future, with secure jobs and secure energy guaranteed for the next generation. We have been pressing the case at every opportunity for Wylfa’s incredible benefits as a site, and I warmly welcome this major decision to invest in northwest Wales. Wales is once again leading the way.”

Small modular reactors are compact nuclear power stations, built as prefabricated units for on‑site installation, with the aim of being constructed more quickly than sites like Hinkley Point C.

Nuclear power is not new to the Welsh island. A station was first constructed in the 1960s and began generating electricity in 1971. The two reactors operated for decades before being shut down. Reactor 2 was decommissioned in 2012, followed by Reactor 1 in 2015.

Efforts to revive nuclear generation at the site have also been made before. In 2021, proposals to build a new plant were abandoned under the previous UK government.

Rhun ap Iorwerth, Plaid Cymru leader and MS for Ynys Mon, welcomed the investment, but aired caution over previous false hope.

He said: “Today’s announcement is significant for people on Ynys Mon and across Wales. It reflects years of hard work by both the Plaid Cymru-led Anglesey County Council and Llinos Medi – both as the current MP and former council leader.

“Since I was elected over 12 years ago, the future of the Wylfa site has remained a live issue on Ynys Mon. Whilst we’ve learnt from past experience that we need assurances now that this plan will actually be delivered, there’s no doubt that there’s a real opportunity here that we have to take advantage of.”

He added that his priority is “to ensure that the voices and interests of communities on Ynys Mon are represented at every step”, and that he has “always taken the view that we must make the most of the economic growth and job opportunities for young people that come with a new development at Wylfa”, while mitigating “the challenges” that such projects bring.

“The Welsh government also has a crucial role to play in these discussions. I want to make sure that Welsh government has real input, with Welsh interests placed at the heart of the development,” he concluded.

Business

Dua Lipa and Coldplay call on government to keep its promise on ticket resales

Published

13 mins ago

November 13, 2025

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Dua Lipa and Coldplay call on government to keep its promise on ticket resales

Some of the biggest names in music – including Coldplay, Dua Lipa and Radiohead – have urged the government to honour a pledge to cap ticket resale prices and shutout touts.

They have joined artists including The Cure’s Robert Smith, New Order, Mark Knopfler, Iron Maiden, PJ Harvey and this year’s Mercury Prize winner Sam Fender to sign a statement calling for a cap to “restore faith in the ticketing system” and “help democratise public access to the arts”.

Other signatories include the watchdog Which?, FanFair Alliance, O2, the Football Supporters’ Association and organisations representing the music and theatre industries, venues, managers, and ticket retailers.

In the statement, the coalition says new protections are needed to “help fix elements of the extortionate and pernicious secondary ticketing market that serve the interests of touts, whose exploitative practices are preventing genuine fans from accessing the music, theatre, and sports they love”.

Labour had promised in its manifesto to put a stop to concert-goers being scammed or priced out of events by touts using bots to buy tickets in bulk the moment they go on sale, which they can then sell on for huge mark-ups on secondary ticketing websites.

In government, the party again made that promise – but more than a year after it vowed action, and seven months since its consultation on the issue closed, there has been no clear indication of when new laws will be introduced.

The campaign comes as a new investigation from Which? found prolific sellers in locations including Brazil, Dubai, Singapore, Spain, and the US hoovering up tickets for popular events in the UK before relisting them at vastly inflated prices on StubHub and Viagogo.

How much?!

Which? found Oasis tickets for Wembley shows listed for £3,498.85 on StubHub and £4,442 on Viagogo.

A seat for the Minnesota Vikings vs Cleveland Browns NFL clash at Tottenham Hotspur was listed for £3,568.39 on StubHub, while a Coldplay ticket, also for Wembley, was £814.52 on StubHub.

And a ticket for the All Points East festival in London’s Victoria Park, headlined by Raye, for £114,666 on Viagogo.

The watchdog found it was often difficult for buyers to establish the seller’s identity or to contact them – despite the Competition and Markets Authority securing a court order in 2018 requiring Viagogo to outline the identity of traders.

And there’s more…

Which? also found evidence of speculative selling – when tickets are listed on secondary sites even though the seller has not bought them yet.

Tickets for a Busted vs McFly show in Glasgow, which were available through Ticketmaster – the original seller – were simultaneously being listed on StubHub and Viagogo at double the price.

Government to set out plans ‘shortly’

Which? consumer law expert Lisa Webb urged Prime Minster Sir Keir Starmer to commit to legislation.

A government spokeswoman said it is “fully committed to clamping down on touts,” had listened to comments in response to the consultation earlier this year, and would set out its plans “shortly”.