Resolution Foundation
UK think tank analysing living standards for low- and middle-income households.
The Resolution Foundation said on 8 September 2026 that about £1 in every £12 of public spending now goes on debt interest, having put the Chancellor's headroom against the fiscal rules at about £10bn in July.
Last refreshed: 7 October 2026 · Appears in 1 active topic
Why do frozen tax thresholds erase early income gains, according to the Resolution Foundation?
Timeline for Resolution Foundation
Mentioned in: UK net debt passes £3trn at 94.0% of GDP
Is Britain Actually Broke?UK welfare ran £2.5bn over in September
Is Britain Actually Broke?Healey rules out three big tax rises
Is Britain Actually Broke?Mentioned in: UK vacancies rise for the first time
AI: Jobs, Power & MoneyMentioned in: London's equity share slips to 57%
UK Startups and InnovationBackground
The Resolution Foundation is a UK think tank, founded in 2005, that analyses living standards for low- and middle-income households. It is usually described as centre-left but presents itself as a research institute rather than a party platform. Its regular work on pay, tax, pensions, housing and inequality informs parliamentary committees and government departments.
Its method is distributional: where fiscal debate deals in aggregate borrowing and spending, the foundation asks which households gain or lose. That makes it a regular counterpoint to free-market think tanks such as the Institute of Economic Affairs in coverage of the public finances, and a reference point on how a Budget lands on typical incomes.
It also reads the Labour market closely. In July 2026, when official figures showed UK vacancies rising to 712,000, the first quarterly rise that series had recorded, senior economist Nye Cominetti called it a rebound after two straight five-year lows rather than a turn. Because its research spans pay, tax, pensions and housing, its findings recur across economic, housing and welfare coverage well beyond any single Budget.
Debt interest takes £1 in £12
In July 2026 the Resolution Foundation put the government's headroom against its fiscal rules at about £10bn. On 8 September it added that about £1 in every £12 of public spending now goes on debt interest.
Those two numbers frame the 28 October Budget from the foundation's side of the argument. Chancellor John Healey ruled out rises in value added tax, income tax and corporation tax on 7 September, which leaves thresholds, smaller taxes, spending and welfare as the levers. Borrowing from April to August then overshot the OBR's profile by £8.1bn, close to the whole of the foundation's July headroom estimate. For a body that tracks low- and middle-income households, a gap closed through frozen thresholds or welfare savings falls on exactly the incomes it measures.
Its income outlook fades after 2026-27
The Resolution Foundation's July 2026 outlook projected typical non-pensioner incomes rising 1.2% in 2026-27, with the poorer half of non-pensioner families gaining 4.7%, before growth stagnates again later in the decade.
It traces the fade to tax and housing. Frozen income tax thresholds pull more earners into higher bands, while council tax and housing costs keep rising. The foundation argues that the coming squeeze on ordinary households will arrive mainly through those channels, and that debating pension costs such as the triple lock in isolation understates it. Its projection sits beside the rise in personal insolvency to one adult in 369 in the year to June: two readings of the same pressure on household finances.
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Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Updated 7 October 2026. Editorial standards.