The households of a majority of salaried respondents are worse off this year than they were a year ago, according to Dawn.com’s annual pre-budget survey. Nearly 65 per cent of the 650 respondents described their household’s financial position as either “somewhat worse” or “much worse”.

The survey seeks to gauge how the previous fiscal year’s budget and broader macroeconomic conditions have affected household finances, and to identify the issues respondents believe policymakers should prioritise in the upcoming budget. The findings suggest that while macroeconomic stability has improved over the past year, the benefits have yet to translate into a meaningful improvement in living standards for much of the salaried middle class.

The survey largely captures the experience of urban, salaried households. About 83pc of respondents are salaried earners, most between the ages of 25 and 44. Roughly 70pc earn less than Rs300,000 per month, and a significant share of that income is absorbed by essential expenses, particularly food and groceries.

As in previous years, health, education, savings and leisure account for a relatively small share of household budgets. Health expenditure remained below Rs20,000 a month for nearly three-quarters of respondents, while around 40pc spent less than Rs20,000 on education. The data suggests that many households continue to prioritise immediate consumption needs over longer-term investments in human capital and financial security.

Kitchen expenses have seen the steepest rise as inflation eats into into the food and grocery budget. Transport costs tell a similar story.

The proportion of respondents spending more than Rs30,000 a month on transport has risen steadily from 11pc in 2019 to 49pc in 2026. Higher fuel prices, repeated increases in the petroleum levy and rising vehicle operating costs have all contributed to the increase.

Utility expenses exhibit a slightly different pattern. The share of respondents spending more than Rs40,000 a month on utilities rose gradually until 2023 before jumping sharply in 2024, when electricity tariffs and gas prices increased significantly as part of reforms linked to Pakistan’s IMF programme. Since then, the figure has declined and stabilised. One possible explanation is the growing adoption of rooftop solar systems, particularly among middle-income households, which has helped offset rising grid electricity costs.

Perhaps the most striking trend is the decline in savings and investment. In 2021, more than 36pc of respondents reported saving or investing over 10pc of their household income. By 2026, that figure had fallen to just 12.5pc. The deterioration coincides with the inflation shock of 2022-24, during which households increasingly drew down savings or reduced investments to maintain living standards. The findings suggest that even as inflation recedes, many households remain in a rebuilding phase, with little room to restore savings after several years of falling real incomes.

Taken together, the results paint a picture of households that have adjusted to a higher-cost economy. While macroeconomic indicators have improved relative to the crisis years, the gains have yet to translate into greater financial security for much of the salaried middle class.

Note: Graphs show percentage of respondents for each threshold. The ranges have been adjusted to account for inflation and economic changes.

Published in Dawn, The Business and Finance Weekly, June 15th, 2026