Families forced to shell out extra £4k for essentials
While the typical monthly net income has increased to £2,043 per family from £1,983 in November 2011, average outgoings are now £1,819, according to the Aviva Family Finances Report.
The report shows that while price increases on essentials may seem small in isolation at £20-£30 a month on average, they have added £3,972 a year to household bills.
With more pressure on their finances, families are making efforts to cut back on non-essential spending.
Since November 2011 the number of families spending on sport and leisure goods has fallen from 61% to 55%, while spending on personal goods such as make-up and medicines has dropped from 81% to 76% of families.
The figures also suggest a significant number are sacrificing an arguable ‘essential’ by cutting motoring costs to reduce their outgoings (77% to 72%).
Louise Colley, head of protection sales and marketing says: “This latest report reveals a mixed bag of fortunes for UK families as they face higher living costs set against relatively stagnant incomes. However, it’s promising to see that families are adjusting their spending habits to take account of these changes and good news that these growing expenses have not prevented families increasing their debt repayments or savings.”