Transport costs biggest drain on household budgets
Basic living costs are eating up more than half of consumers’ monthly spend, with transport now the largest expense for Brits.
Spending on recreation and culture has fallen over the past 12 months as households struggle with the rising costs of essential goods and services, research by Halifax has found.
Anthony Warrington, director, personal current accounts at Halifax, said: “Everyone has different priorities when it comes to spending, but the rising cost of basic goods and services has left people with less to spend each month once essentials like food and shelter have been accounted for.
This comes as households face further financial strain as the cost of energy bills hit new highs.
From Monday, the average water bill is set to increase 3.5% after regulator Ofwat’s water price hike comes into effect. This follows a winter which saw all of the ‘Big 6’ energy suppliers increase their prices.
Meanwhile, the Citizens Advice Bureau has hit back at claims that households are on average better off than they would have been in the absence of the Government’s energy and climate change policies.
A report from the Department of Energy and Climate Change (DECC) said householders are paying on average £64 or 5% less for their gas and electricity bills as a result of Government energy policies compared to if no policies had existed, and in 2020 the net saving against the do-nothing scenario will reach £166 or 11%.
Gillian Guy, chief executive of Citizens Advice, said: “The Government’s claim to providing a cushion between energy prices and household bills is unlikely to offer much comfort to the tens of thousands of people racking up debts because they can’t afford to heat their homes or keep the lights on.
“Household fuel bills are going up and bureaux see too many families forced to make the decision between heating and eating.
“The poorest households are picking up the tab for the Government’s energy projects as costs are added to everyone’s energy bills.
“If the Government is going to continue down this regressive road they need to make sure that the fuel poor benefit by ring fencing more of the Energy Company Obligation for them.
“Energy companies also need to be quicker to pass on savings to customers when wholesale prices fall.”