Households are on track to be £400 worse off this year due to a "triple hit" of higher bills, taxes, and benefits failing to keep pace with cost-of -living.

The bleak Resolution Foundation analysis found while the Government has kept its promise not to hike taxes on working people, family budgets are still taking a hit.

Ahead of the new tax year it said freezes to personal tax thresholds first introduced by the Tories will result in some being dragged into paying a higher rate. Chancellor has promised to end the freeze - but not until 2028-2029.

Rising utility bills and council tax hikes are also adding to the strain, the think-tank said.

Researchers warned the average household is facing a council tax hike of £80, with the majority of cash-strapped town halls putting up bills by 5%. Inflation-busting water bill increases are also rising on average by £120-per-year.

And the think-tank predicted working-age benefits will face to keep pace with inflation.

The Resolution Foundation described this week's bumper hike in the minimum wage as a "chink of light in an otherwise gloomy outlook". It was increased for those aged 21 and over rises from £11.44 per hour to £12.21 per hour.

But with all the changes together, the think-tank said disposable income of a typical working-age family is projected to fall by 1% - £400 in real-terms this financial year. Households in the poorest will be hit by a sharper fall of 2% - or the equivalent of £300.

Adam Corlett, principal economist at the Resolution Foundation, said: "The new tax year has arrived, and brings with it higher taxes, even larger bill increases, and benefits that aren’t keeping pace with the rising cost of living.

"The typical household is now projected to be £400 worse off this financial year, due to a combination of weakening earnings growth, rising housing costs, taxes and bills, and benefits struggling to outpace inflation.

"As vulnerable households try to meet these rising costs, the Government can help by bringing forward next year’s welcome boost to this October.”

A Government spokesman said: “Living standards, measured by the broader RHDI per capita measure, are growing at their fastest rate in two years. We’re also putting more money into people’s pockets by boosting the minimum wage by up to £1,400 a year, freezing fuel duty and protecting working people with no rise in their national insurance, income tax or VAT.

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