Monday, July 25, 2022

Tightening one's belt

 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.

Mark Nalder, head of payments at Nationwide building society, said: “Following a peak in spending during May, our data suggests households have started to cut back across the board and where they can. This is happening as we enter the summer period where customers will want to enjoy themselves, so it will be interesting to see how these often conflicting interests are balanced.

“As we head into the holiday season, we expect budgeting to continue being a feature as the nation prepares for even higher costs with inflation continuing to climb and the energy price cap rising again this autumn.”

Fifth of UK households now have ‘negative disposable income’ | UK cost of living crisis | The Guardian

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