Inflation remains one of the biggest financial pressures facing households in 2026. Although inflation fell to 2.8% in the year to April, down from 3.3% in March, economists expect it could rise again to around 4% by the end of the year as global tensions and higher energy costs continue to affect the economy.
While a lower inflation rate is welcome news, it doesn't mean prices are falling. It simply means prices are increasing more slowly than before. Essential costs such as food, fuel and household energy remain significantly higher than they were just a few years ago, continuing to put pressure on household budgets.
Lower-income households are often affected the most because a larger proportion of their income is spent on everyday essentials.
Higher supermarket bills, rising transport costs, and rising utility prices can leave less room for savings or to cover unexpected expenses. According to the Office for National Statistics (ONS), many households also have low financial resilience, with more adults relying on borrowing or credit to help cover everyday living costs, compared with 2025.
Financial pressures can quickly affect mortgage affordability.
You may find it more difficult to keep up with monthly mortgage repayments, while homeowners coming to the end of a fixed-rate mortgage could face higher interest rates when arranging a new mortgage deal. First-time buyers may also find it more challenging to save for a deposit as everyday living costs continue to rise.
There are several practical steps households can take to prepare for rising inflation.
Reviewing your monthly spending, reducing unnecessary outgoings and building a small emergency fund may help improve your financial resilience. If you're worried about keeping up with mortgage repayments, it's important to speak to your lender as early as possible, as support options may be available before arrears build up.
Every household's circumstances are different, and the right approach will depend on your individual situation.
If you're concerned about the impact of inflation on your mortgage or would like to discuss the options available to you, get in touch with one of our advisors. We're here to help you understand your options and make informed decisions during a challenging financial period.
To find out more about mortgages, personal insurance, business insurance and protection or to discuss the options available for your circumstances, contact our team of advisors
