One in five UK households saw a drop in income in the last quarter, a survey suggests. This was due to a unemployment, loss of bonuses, a reduction in overtime or more part-time working.
Inflation is driving up the cost of essentials, with 44% of respondents spending more on food. Half said they were spending more on utility bills and 37% were spending more on transport costs.
As a result, consumers cut back on their discretionary spending on things like entertainment and holidays. 41% of consumers were spending less on entertainment. It found that 28% were cutting back on holidays, while 36% were spending less on clothing and footwear.
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Families have been hit with an average £552 fall in disposable income over the past year, according to the Bank of England's survey.
Workers in about half of all households surveyed by the Bank are putting in longer hours or taking on second jobs as a result of the income squeeze.
"The main responses that households had taken was through the labour market ... the most common actions were to cut back on spending, work longer hours or take on a second job." The responses chime with official figures that revealed falling employment levels but a surprise 150,000 rise in total workforce jobs – signalling that people are taking on more part-time work and second jobs to pay the bills. Nearly a quarter of households had "no idea" what their income would be in a year while about a third were less certain about the state of their finances than a year ago.
http://www.independent.co.uk/news/uk/home-news/families-suffer-552-blow-to-disposable-income-bank-reveals-6279082.html
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