Average household incomes will fall 2% after Budget 2026

'Low-income households will significantly more as a proportion of their disposable income'

For higher income households, it said the freeze on tax bands and credits will amount to an effective tax rise if wages grow at their forecasted rate of 3.7% in 2026. Picture: Sasko Lazarov/RollingNews.ie

A lack of cost of living measures in the budget will see an average loss of household income of around 2% next year with “low-income households losing significantly more as a proportion of their disposable income”, research from the ESRI has found.

In its budget assessment, the ESRI said at a household level, measures announced in the budget will result in small income losses next year compared to a budget indexed to forecast income growth. “The withdrawal of temporary cost-of-living measures is responsible for much of this effect,” the ESRI said.