Last week’s Budget delivered one clear message. The financial pressure on households is not easing any time soon. While the Chancellor avoided raising headline income tax rates, the measures announced will still increase the amount many people pay. For anyone already managing debt, or worried about missed payments, this matters.
The government confirmed that income tax and National Insurance thresholds will stay frozen until 2028. Threshold freezes sound harmless, but they quietly pull more people into higher tax bands as wages rise with inflation. In practice, millions of working adults will pay more tax without earning more in real terms. For households with credit card balances, loans, overdrafts or existing arrears, this squeeze can make day to day budgeting much harder.
Dividend tax rates will also rise from April 2026. This mainly affects business owners and self employed people who take part of their income as dividends. In the North West this is significant because many small firms, contractors and local tradespeople operate this way. Higher dividend tax means less take home pay, at a time when costs are already increasing.
The Budget also confirmed that tax relief on some pension salary sacrifice arrangements will reduce from 2029. While this feels distant, it signals a long term tightening on tax planning options. For those already behind on bills, the lack of immediate support for low income working households is concerning.
The Budget included help for certain groups, including the removal of the two child limit within the benefits system. This will increase support for some families, but it does not address the rising number of people in work who are falling into arrears. There was no significant support for households facing problem debt, nor any expansion of schemes that help people recover from difficult financial situations.
For many, the biggest issue is simple. Their wages are not rising in line with food, rent, utilities and other essentials. Inflation has eased, but the cost of living has not returned to pre crisis levels. As a result, more people are relying on credit to cover routine expenses. This can be manageable for a short period, but over time the interest builds and the situation becomes stressful and overwhelming.
At Adcroft Hilton, we understand how quickly financial pressure can escalate. Missed payments, rising balances and constant worry can affect mental health, relationships and work. The most important message following this Budget is that help exists. Debt problems do not have to continue and they do not have to define your future.
If you are concerned about rising costs or increasing tax burdens, speak to a qualified adviser as soon as possible. The earlier you act, the more options you are likely to have. Professional support can make a genuine difference, helping you stabilise your finances and move forward with confidence.
Budget day can be unsettling when you are already under pressure, but you do not need to face it alone. If you are worried about debt, insolvency or the impact of rising costs, we are here to help you find a practical way forward.
Please get in touch if you need support.
Adcroft Hilton: Debt, Insolvency & Bankruptcy Specialists
Helping you make the right choice for your financial future.
