Thu, 27 Jul 06
The average UK household is now worse off than at any time in the last five years, according to a new report into the amount of cash we have left to spend every month.
The study by Ernst & Young into consumers’ spending power reveals the monthly discretionary income for a typical household has dropped almost 10% since 2002/03. The average household now has £82.02 less to spend each month after total fixed monthly outgoings, compared to 2002/03.
Indeed ‘fixed’ monthly household costs continue to outstrip wage inflation and have risen by more than 30% since 2002/03. These costs now account for more than 71% of a typical household’s net income compared with 64% four years ago.
Tim Sleep, director of retail at Ernst & Young comments: "Increases in average mortgage payments, coupled with rising fuel prices and massive hikes in utility prices, continue to squeeze the typical UK household."
"Many UK consumers are shackled by these constant increases in fixed monthly outgoings. Consequently, discretionary spending power continues to decline and consumers are simply not in a position to spend freely."
And the situation is set to get worse as energy prices soar. Following news earlier this week that Energy giant EDF raised household costs another 19% on gas bills and 8% for electricity from the end of the month - see our story Bigger energy bills - and more to come - British Gas has now also decided to raise prices by up to 12.4% for its 10.7 million customers from September.
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