Report

Beyond the cost of living crisis

This report from UK think tank Carnegie UK examines affordability and financial resilience across the UK and its four jurisdictions in 2026. 

The cost-of-living crisis has been a defining feature of public discussion across the UK in recent years.

When people cannot afford essentials, cope with unexpected costs or participate fully in society, the effects reach beyond household finances and into wider wellbeing. Economic wellbeing shapes people’s choices, opportunities and ability to live well. Carnegie UK defines economic wellbeing as ensuring that everyone has a decent minimum living standard and can absorb financial shocks. This includes access to a decent income, affordability, financial resilience, job opportunities and skills.

Understanding these realities requires us to look beyond headline economic indicators and consider whether people have the resources and resilience they need in their daily lives.

Measures such as inflation, employment, wages and growth provide important context, but they do not necessarily tell us whether people can afford essentials or withstand financial shocks or take part in activities that contribute to wellbeing.

Using data from Carnegie UK’s Life in the UK index, this paper examines affordability and financial resilience across the UK and its four jurisdictions in 2026. By tracking changes over time and examining differences across the UK, it provides insight into how financial pressures are experienced today, where progress has been made and where challenges remain.

While some pressures have eased since 2023, particularly in relation to how affordable people find it to keep their home adequately warm, improvement is not universal across all measures of affordability and financial resilience.