If the economy is slowly bouncing back, why do we feel worse off?

• Why the recovery isn’t reaching your wallet (yet)
• What can you actually do about it?
• Is there any good news?

Increases in council tax, energy bills, water charges, and food prices mean families are feeling the pinch. In fact, for many, things have become harder. Let’s break down the disconnect—and see how families can save money on household costs.

Why the recovery isn’t reaching your wallet (yet)

Despite the positive signs, economic growth is a broad measure. It can be driven by certain sectors like construction or exports, while others lag behind, meaning households in general continue to feel squeezed.

According to the Resolution Foundation, real wages in the UK remain significantly behind where they should be, with an estimated 37% ‘lost wages gap’ since 2008. For many families, that means pay is not keeping up with the cost of living.

Then we had April’s price hikes affecting household costs. Council tax in England rose by up to 10% in some areas. Water bills jumped by over 25% in parts of the UK. Broadband, mobile, and even car tax all saw increases.

Inflation is another problem. After briefly slowing, it rose to 3.5% in April, then 3.6% in June, keeping prices high—especially for essentials like food and utilities.

So yes, the economy is technically "growing". But for many of us, our expenses are growing faster—impacting our wallets and financial health.

What can you actually do about it?

Here are five practical steps to regain control, even while the economy recovers on paper:

1. Review your household bills

Check if you’re overpaying on energy, broadband or insurance. Use comparison tools to switch to cheaper deals. Avoid impulse spending, even if an item comes with zero interest, Buy Now, Pay Later options.

2. Check for council tax discounts 

If you live alone, are a student, or receive certain benefits, you may be entitled to a reduced council tax bill.

3. Get on top of your credit score

A better credit score can help you access lower-cost borrowing whether you are looking to get a personal loan or borrow money for a car. It can take time to improve, but there are several easy fixes to improve your credit score.

4. Rethink subscriptions and services

Small cuts can free up cash. Consider cancelling services you don’t use or downgrading plans.

5. Budget with smarter tools

Budgeting apps like Plum, Emma or Monzo can help you track spending, spot leaks, and build savings habits.

Is there any good news?

Yes, if we see increased economic recovery, our wallets will feel the effect over time. UK consumer confidence was up in May, especially after US tariff concerns.

Interest rate rises have also stopped, meaning it’s not as expensive to borrow as it was in 2023. The Bank of England’s rate affects not only mortgages, but also personal loans and credit card interest rates. The flip side is you may not get the same high interest rates from savings accounts.

In conclusion:

The economy may be growing, but recovery isn’t a headline—it’s a feeling. And for many people in the UK, that feeling is still: "I’m worse off than I was." But even in a tough environment, there are steps you can take to regain some control. Reassess your monthly costs and spending. Set up budget goals and cut costs.

Remember—financial wellbeing isn’t just about what’s happening in Westminster or the stock market. It’s also about how you manage your finances.