The money in our pockets seems to be dwindelling, as new reports suggest that an average family’s disposable income (which is the money left over after bills and essential outgoings have been deducted) falls by £2,500, the first drop since 1997.
More and more families are going to have to seek debt advice as they struggle with their finances as the rise in living costs outstrips any additional pay rises. The study, performed by uSwitch, reports that the average British family now has a disposable income of £14,520, which is 15% less than last year. Rising bills could send more people into debt problems as they will have to find an additional £145 a month for their household bills.
The worse affected town is Newcastle which has seen disposable income levels drop by about 80%, with an average of £4,836 per household. Other badly hit areas are Glasgow, Hull, Nottingham, Blackpool and Southampton, where families are spending more than 60% of their income on essential expenses.
Ann Robinson, of uSwitch, commented: “While British athletes have been going for Gold, British consumers are going for broke. It’s been a year since the start of the credit crunch and these figures reveal the exact price being paid by British consumers.”