A fifth of UK households now have an average shortfall of £60 a week between what they earn and what they need to cover essentials such as energy bills, rent, transport and food, as the rising cost of living leaves people with the lowest amount of spare cash in almost five years.
Living costs, up 11% year on year in June, led to a record 18% drop in average household disposable income of £175.80 a month.
The average household had £200 a week left after paying tax and essential bills last month – a figure that has fallen for eight consecutive months.
The squeeze on cash is leading people to cut back on non-essentials.
Those on the lowest incomes were hardest hit. Those in north-east England and Northern Ireland fared worst.