Budget 2026: An Ipswich Family Faces a £250 Monthly Squeeze

A family in Ipswich faces an extra £250 a month on its mortgage once its fixed rate expires, and the mother of two says there is nothing left to cut. "There's just no more fat to trim," Dawn Fazackerley-King said ahead of Chancellor John Healey's first Budget, due on Wednesday.

Her home loan rate could jump from 1.4% to about 5.3% within months. That works out, in her words, at "about £250 extra a month just for living in the same property". She works full-time as a self-employed Pilates instructor. Her husband works in an office. Their household income is about £70,000 a year, with two children aged six and eight.

"We just have to find that money from somewhere, but when you look at the direct debits every month, there's nothing fancy in there," she said. "There's no regular meals out or anything like that." The family has spent the past few years, in her phrase, "trimming the fat accordingly".

Is she part of the "squeezed middle"? "Yes. Life is definitely getting more expensive," she said.

How widespread is the squeeze?

The numbers say her case is common, not exceptional. In August, 55% of adults who responded to an Office for National Statistics survey said their cost of living had risen compared with the previous month. That rate is down from 62% in August 2025 and from 79% in April this year. But more than half of adults still report rising expenses, which points to a chronic condition rather than a short crisis.

Among those reporting higher costs, the most common drivers were food shopping, fuel and energy bills. The direction is clear: costs keep climbing, just more slowly than before.

What has the government done so far?

In the summer, Prime Minister Andy Burnham promised to create "breathing space" for struggling households. He announced a £2 cap on most single bus fares in England and a cut to VAT on domestic electricity bills. More recently, he announced plans to remove standing charges on gas bills.

Dawn welcomed the move on standing charges but said ministers had been "trying to put sticking plasters over gaping wounds", which were "not fixing the problems". Her message to the prime minister and the chancellor: "Please start listening. The cost of living is becoming unbearable and I don't feel that the government are always hearing that message."

The Office for Budget Responsibility, which independently analyses the UK's public finances, has predicted that real household disposable income will grow by an average of 0.75% a year between 2026 and 2030. That same measure, which balances income, taxes, benefits and costs, grew by an average of 3% a year between 2000 and 2007. The comparison shows the arithmetic confronting Healey: household living standards are set to grow at a quarter of their pre-financial-crisis pace.

Where did the term come from?

Ed Miliband introduced "squeezed middle" into political conversation shortly after he became Labour leader in 2010. The following year the Oxford English Dictionary named it expression of the year, defining it as "the section of society regarded as particularly affected by inflation, wage freezes and cuts in public spending during a time of economic difficulty" — principally those on low or middle incomes.

What does the squeeze look like further down the income scale?

Jessica Taylor, 41, a single mother in Clacton-on-Sea, Essex, earns about £26,000 a year and receives Universal Credit. She said she is "definitely" feeling the squeeze. She told her 11-year-old son they are "poor in the sense that on paper we live month to month". "If I lost my job, we've got one month – maybe two – and then we are the real poor," she said.

She does what she calls "the really small things" to stretch her money. One habit: hunting streets with unrestricted parking using satellite images. She spends "10 minutes in the bath on Google Earth going 'that road!'" before heading out.

She described herself as "happy… content… grateful" but said: "I wish I could do more – I wish I could not panic if a car bill comes in, maybe not ask mum for help sometimes, which is rare." She has sacrificed holidays so her son can have regular days out and experiences through the year.

Jessica and her 62-year-old mother Karen Badenoch run Trusted Money Confidence, a community interest company hosting free sessions where people share money-management advice. Karen, formerly an administrator at an architecture practice, said they regularly see "people in work, racking up debts on credit cards and buy-now-pay-later just to be able to get to the end of the month".

Her advice: "The biggest thing that anyone can do is be open... and look at what your issues are – and that way you can resolve them. It is a huge lift off your mind if you actually start dealing with things and facing up to them, and believe me – you're not alone."

What can Healey actually do?

The chancellor has promised the Budget will keep to Labour's commitment not to raise the three main taxes — income tax, National Insurance and VAT — while sticking to the party's fiscal rules. He recently said it would deliver "growth in every postcode, while giving businesses and families some breathing space".

That pledge now faces a concrete test. With mortgage resets like Dawn's still in the pipeline and disposable income forecast to grow at 0.75% a year, Wednesday's statement will show whether breathing space is a policy or a phrase.