The Office for National Statistics (ONS) published its Household Costs Index (HCI) for UK household groups on 28 August 2026, covering April to June 2026. Overall UK household costs rose by 2.8% in the year to June 2026, a decrease from 3.6% in the year to March 20261. The annual rate in the Consumer Prices Index (CPI) was 2.6% in the year to June 2026, leaving a gap of 0.2 percentage points between the two measures, unchanged from March 20261.
The HCI differs from CPI and CPIH in how it weights spending and what it includes. The ONS said the HCI basket uses the average household's share of expenditure, while the CPI and CPIH baskets reflect the total share of expenditure across all households1. The HCI also includes changes in mortgage interest rates, stamp duty and other costs related to buying a dwelling, which are omitted from CPI1. Council Tax is not included in CPI but contributed 0.21 percentage points to the HCI annual rate1.
By income group, costs for low-income households (decile 2) rose 2.7% and for high-income households (decile 9) 2.8% in the year to June 20261. The ONS said this was the first month that lower-income households had a lower annual inflation rate than high-income households since March 20251. By tenure, private renters had the highest annual rate at 3.0%, followed by mortgagor and other owner-occupier households at 2.8%; outright owner-occupiers had the lowest at 2.6%, followed by social and other renters at 2.7%1.
| Group | March 2026 | June 2026 |
|---|---|---|
| All households | 3.6% | 2.8% |
| Income decile 2 (low) | 3.7% | 2.7% |
| Income decile 9 (high) | 3.5% | 2.8% |
| Private renters | 3.7% | 3.0% |
| Outright owner-occupiers | 3.6% | 2.6% |
| Non-retired households | 3.7% | 2.9% |
| Retired households | 3.6% | 2.5% |
Source: ONS, Household Costs Indices, April to June 20261
Annual inflation fell for both retired and non-retired households between March and June 2026, but the gap between them widened by 0.4 percentage points. Non-retired households had a rate of 2.9% in June 2026, against 2.5% for retired households1. Households with children and households without children both recorded 2.8%, down from 3.5% and 3.7% respectively in March 20261.
The fall in the all-household rate was driven mainly by housing and household services, where the contribution fell from 1.22 to 0.45 percentage points between March and June 2026, and by food and non-alcoholic beverages, down from 0.45 to 0.20 percentage points1. This was partly offset by transport, where the contribution rose from 0.58 to 0.79 percentage points, including fuels and lubricants rising from 0.14 to 0.56 percentage points1. The ONS said annual inflation rates for gas and electricity fell from April 2026 onwards, reflecting lower domestic energy prices after a reduction in Ofgem's energy price cap1.
"This is the first month that lower-income households have experienced a lower annual inflation rate compared to high-income households since March 2025."
Over five years, cumulative inflation was similar for both groups: 32.8% for high-income households and 32.7% for low-income households1. Non-retired households and households with children saw cumulative HCI inflation of 33.2%, against 31.9% for retired households and 32.9% for households without children1.
The ONS describes the HCIs as official statistics in development and advises caution, as estimates may be revised because of methodological improvements1. Scanner data covering approximately 50% of the grocery market was introduced from the February 2026 index, published on 25 March 20261.
Why it matters for households
The HCI is designed to show how price changes land differently depending on what a household spends its money on, rather than giving a single national figure. The June 2026 data show the overall rate easing to 2.8%, but the spread between groups remains: private renters at 3.0% and non-retired households at 2.9% faced faster cost growth than retired households at 2.5% and outright owner-occupiers at 2.6%1. Because the HCI includes mortgage interest, stamp duty and Council Tax, its rate can diverge from the CPI figure that underpins many uprating decisions, and the two measures sat 0.2 percentage points apart in June 20261. The reversal in the income comparison means low-income households recorded a slightly lower annual rate than high-income households for the first time since March 2025, though the ONS notes the five-year cumulative figures for the two groups are close1.
What happens next
The next HCI release is scheduled for 27 November 20261. The ONS also published CPI data for August 2026 on 16 September 2026, showing CPI at 3.1% and CPIH at 3.3% in the 12 months to August 20262.
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