Cost of living · Fictional household · England · 2026/27
A young family who have just bought: what is left each month?
Olivia & Ben (22 & 23 · one baby · first-time homeowners). In this example £3,579 comes in each month and £2,486 goes on housing, bills and debts, leaving £1,092. A fictional household, built from 2026/27 rules and stated assumptions.
Evidence last reviewed 29 October 2026
Who they are
22 & 23 · one baby · first-time homeowners
Meet Olivia & Ben
The first keys. A new baby. Two reasons to need a buffer.
Olivia is 22 and earns £24,000; Ben is 23 and earns £26,000. They have a six-month-old baby and have just bought an assumed £180,000 starter home with a £9,000 deposit. Their £171,000 mortgage costs £866 a month at an assumed 4.5% over 30 years.
A month in pounds
England · 2026/27 rules · fictional household · every line is listed below
Left each month
£1,092
Still to cover leisure, holidays, emergencies and any saving.
Money coming in
- Olivia · take-home pay£24,000/year gross; modelled tax, NI and workplace pension deducted
- £1,674
- Ben · take-home pay£26,000/year gross; modelled tax, NI and workplace pension deducted
- £1,787
- Child Benefit · one babyPublished 2026/27 first-child rate; assumed claimed
- £117
- Total
- £3,579
Housing and bills
- Mortgage · 4.5%, 30 yearsScenario assumption
- −£866
- Food & household shoppingScenario assumption
- −£400
- Energy & waterScenario assumption
- −£180
- Council taxScenario assumption
- −£155
- TransportScenario assumption
- −£260
- Phones & broadbandScenario assumption
- −£70
- Baby supplies & clothesScenario assumption
- −£140
- Home maintenance reserveScenario assumption
- −£125
- Insurance & other essentialsScenario assumption
- −£130
- Total
- −£2,326
Debt repayments
- Ben · student loan (Plan 2)9% of pay above £29,385 (2026/27 threshold)
- £0
- Car finance · second-hand carScenario assumption
- −£160
- Total
- −£160
Each line is rounded to the nearest pound, but totals are worked out from the exact amounts, so adding the rounded lines can give a pound more or less than the total shown. The exact amounts are in the workings.
What would change it
Owning at 22 and 23 does not remove the childcare question. An extra £500 monthly childcare bill would take £500 from this remainder before any entitlement to childcare support. A period on parental leave or reduced hours needs a different income assumption.
What Budget 2026 could mean for them
These are announcements with dates and conditions, not money already in the budget above. None of them is added to Olivia & Ben’s month.
Household Energy Payment
£100 off council tax from January 2027 if their starter home is in bands A to D.
As announced: Household Energy Payment: £100 council tax rebate for bands A-D from January 2027. Who it covers: Payment: households in England in council tax bands A–D, up to 20 million of them; the devolved governments receive a Barnett share and decide its use. VAT cut: domestic electricity across the UK..
Support for Energy Bills
No VAT on electricity from October 2026 to July 2027.
As announced: Support for Energy Bills: Cut VAT on domestic electricity from 5% to 0% from 1 October 2026 to 1 July 2027. Who it covers: Payment: households in England in council tax bands A–D, up to 20 million of them; the devolved governments receive a Barnett share and decide its use. VAT cut: domestic electricity across the UK..
Fuel Duty
The 5p fuel duty cut stays until July 2027.
As announced: Fuel Duty: Extend the temporary 5p-per-litre duty cut and defer the planned Retail Prices Index (RPI) increase to 1 July 2027.
The Treasury’s average, shown separately
The Treasury estimates households in income group 4 of 10 (1 is the lowest) gain about £53 a year on average from Budget decisions (2027-28), counting tax, benefits and public services. That is an average for households with a similar income and make-up, not Olivia & Ben’s own gain, so it is not added to their month.
Assumptions, workings and sources
Assumptions. The £180,000 home, 5% deposit, 4.5% rate and 30-year term are assumptions, not a lending offer or a national average. Both parents are back at work and cover care between them, so there is no paid childcare. The deposit and buying costs are outside this monthly budget; no equity-loan scheme is assumed. Debts: Ben’s Plan 2 student loan (nothing to repay at his pay) and assumed car finance.
Benefits and support. Child Benefit for one child is included at the published 2026/27 first-child rate. Universal Credit and other means-tested support are not included, and whether the household could get any has not been assessed. Amounts are before any such support.
What is official and what is assumed. Pay after tax, National Insurance, workplace pension, student loans and benefit rates follow the 2026/27 rules for England (official statistic, checked 2026-10-29). Every line marked “Scenario assumption” is an amount chosen for this example. Olivia & Ben are not typical of any group, and one example cannot show how a whole group is doing.
The workings, to the penny
| Line | Exact amount |
|---|---|
| Olivia · take-home pay | £1,674.10 |
| Ben · take-home pay | £1,787.43 |
| Child Benefit · one baby | £117.22 |
| Total coming in | £3,578.75 |
| Mortgage · 4.5%, 30 years | −£866.43 |
| Food & household shopping | −£400.00 |
| Energy & water | −£180.00 |
| Council tax | −£155.00 |
| Transport | −£260.00 |
| Phones & broadband | −£70.00 |
| Baby supplies & clothes | −£140.00 |
| Home maintenance reserve | −£125.00 |
| Insurance & other essentials | −£130.00 |
| Ben · student loan (Plan 2) | £0.00 |
| Car finance · second-hand car | −£160.00 |
| Total going out | −£2,486.43 |
| Left each month | £1,092.32 |
Sources
- HMRC income tax allowances and bands
- HMRC National Insurance rates
- DWP benefit and pension rates
- HMRC Child Benefit rates
- Workplace pension contributions
- Student Loans Company: how much you repay (2026/27 thresholds)
- HM Treasury, Impact on households: distributional analysis to accompany Budget 2026
- How the cost-of-living model works