UK households face a significant blow to their finances, with projections indicating a loss of more than £15,000 in real spending power by 2029. This stark forecast follows the Autumn Budget introduced by Labour Party Chancellor Rachel Reeves, which experts have described as ‘disastrous’ for hardworking families.
Young professionals, often referred to as High Earners Not Rich Yet (henrys), are among the hardest hit. Despite earning solid incomes, many in this group will see their purchasing power decline sharply—by more than £15,000 in real terms over the next several years.
A recent study by IG analyzed the impact of frozen tax thresholds, welfare measures, and government spending decisions under the current Labour administration. The findings reveal that households across the income spectrum will experience significant financial strain through the end of the Spending Review period in 2028-29.
Workers in the ninth income decile—earning around £65,700 annually—face an average decrease in purchasing power of £8,935 over this timeframe. At the higher end of the scale, those earning approximately £103,700 could endure an even steeper reduction, with estimated losses surpassing £15,658.
Chris Beauchamp, Chief Market Analyst at IG, emphasized the disproportionate effect these policies have on the ‘henry’ demographic. “Although income tax and national insurance rates were not increased, the combination of frozen thresholds and other measures will heavily impact these households,” Beauchamp noted. He also pointed out that many in this income bracket carry substantial living costs and do not perceive themselves as wealthy.
Market expert Dan Coatsworth from AJ Bell weighed in on the broader economic implications, linking cautious consumer and business behavior in October to speculation around the Budget. “Uncertainty caused many to hold back on spending, contributing to weaker-than-expected GDP figures,” he explained. Coatsworth added that the delay in announcing the Budget may result in similarly underwhelming economic data for November.
He concluded by highlighting the challenges facing Chancellor Reeves, who prioritized economic growth in her fiscal strategy. “This sluggish data runs counter to hopes of ending the year positively and moving into 2026 with momentum and optimism,” Coatsworth said.