Government · UK · Office for National Statistics
Private Renters Face 3.0% Cost Inflation, Owners 2.6%
UK household costs rose 2.8% in the year to June 2026, down from 3.6% in March. The average hides a real spread: private renters absorbed 3.0% while outright owner-occupiers absorbed 2.6%, and non-retired households faced 2.9% against 2.5% for retired ones.
Source published Summarised
Key findings at a glance
- 2.8% annual rise in overall UK household costs in the year to June 2026
- 3.6% the same all-household measure three months earlier, in March 2026
- 3.0% annual cost inflation for private renters, the highest of any tenure type
- 2.8% annual cost inflation for mortgagor and other owner-occupier households
- 2.7% annual cost inflation for social and other renters
- 2.6% annual cost inflation for outright owner-occupiers, the lowest of any tenure type
- 2.9% annual cost inflation for non-retired households
- 2.5% annual cost inflation for retired households
- 0.4pp gap between non-retired and retired households in June 2026, the widest since April 2025
- 2.7% annual cost inflation for low-income households, income decile 2
- 2.8% annual cost inflation for high-income households, income decile 9, above the low-income rate for the first time since March 2025
- 33.2% cumulative rise in costs for non-retired households over the past five years
What the report covers
The Office for National Statistics published the latest Household Costs Indices on 28 August 2026, covering the year to June 2026. The HCI is not the headline inflation figure. It measures how prices and costs actually land on different types of UK household, and it includes things the Consumer Prices Index leaves out: mortgage interest payments, stamp duty and other costs of buying a home, plus Council Tax.
Across all households, costs rose 2.8% in the year to June 2026, down from 3.6% in March. CPI over the same period was 2.6%, so the HCI ran 0.2 percentage points hotter (we covered the June CPI release when it landed). Council Tax alone, absent from CPI entirely, contributed 0.21 percentage points to the HCI annual rate.
Most of the fall came from energy. Contributions from housing and household services dropped from 1.22 to 0.45 percentage points between March and June, largely because of the reduction in Ofgem's energy price cap. Transport pulled the other way, rising from 0.58 to 0.79 percentage points as motor fuel costs climbed.
What this means for UK marketers
The useful finding here is not that inflation fell. It is that the fall was uneven, and the pattern has flipped.
For most of the past two years, low-income households absorbed the worst of it, because energy and food take a bigger share of their spending. In June 2026 that reversed for the first time since March 2025: decile 2 households saw 2.7%, decile 9 households 2.8%. If your audience segmentation still assumes the bottom of the market is the squeezed end, it is a quarter out of date.
The sharper split is tenure. Private renters faced 3.0% against 2.6% for outright owner-occupiers, a 0.4 percentage point gap driven by rent and mortgage interest, neither of which shows up in the CPI number most brands plan against. Retired households saw the lowest rate of any group at 2.5%, the widest gap below non-retired households since April 2025. For anyone selling considered purchases, that is a real difference in discretionary income between groups that often sit in the same age and income bracket.
Two practical moves. First, if you run age or income targeting on Meta or Google Ads, tenure and retirement status are the variables actually predicting spending power right now, and neither is directly targetable. Postcode-level and interest proxies will do more work than a raw age band. Second, stress-test pricing and offer structure against the segment rather than the average: a 0.4 percentage point spread compounds against the 33.2% cumulative rise non-retired households have absorbed over five years.
Falling inflation is also not the same as recovered confidence. Our earlier read of ONS data on British cutback behaviour found 59% still trimming non-essentials even as rates eased, so expect measured intent to lag the index. That shows up first on-site, in basket abandonment and slower decision cycles, which is a conversion rate optimisation problem before it is a traffic one.
How they got the data
The HCIs are built from two ingredients: price indices, and expenditure weights derived from the ONS Living Costs and Food Survey. The weights are democratic, meaning each household's spending share counts equally, rather than the plutocratic weighting behind CPI and CPIH, where higher-spending households pull the basket towards their own consumption. That difference is the main reason the HCI can move apart from the headline rate. Households are grouped by equivalised disposable income decile using the modified OECD scale, and separately by tenure, retirement status and whether children are present. Deciles 2 and 9 stand in for low and high income, because the top and bottom tenths are small enough that unusual spending distorts them.
Two caveats the ONS states plainly. The 2026 expenditure weights could not be updated because of delays processing the underlying survey data, so these estimates use February to December 2025 weights. And group-specific price indices do not exist, so national price indices are used as a proxy: the analysis captures that households spend differently, not that they pay different prices at different outlets. Price collection itself now leans on scanner data covering roughly half the grocery market, about 300 million price points a month drawn from checkout and online sales, with the remainder still collected manually in store and online. These are official statistics in development and may be revised.
Government · UK
Read the full report
From Office for National Statistics · published 28/08/2026