Higher inflation and healthcare premiums than expected will stop spending power rising by an average of 1% next year after all, the social affairs ministry said on Thursday.

Instead, households will have an average of 0.7% more to spend than in 2016. Poorer families, who receive supplementary housing and childcare benefits, will see their spending power increase the most.

However, one in five households will see no improvement or even a drop in spending power, the ministry said. In particular, pensioners with considerable assets or who have a private pension as well as a state pension will not benefit.

This year, the average household had an extra €800 to spend compared with 2015, largely due to cuts in the basic rates of income tax.