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Britons Worse Off Financially Than Five Years Ago

Britons Worse Off Financially Than Five Years Ago A new report has revealed that Britain’s households are some 15 per cent worse off than in 2003, thanks to soaring bills and mounting debts.

Data published as part of the Ernst & Young Annual Discretionary Income Study found that on average, a household has just 20 per cent of its gross income remaining after all outgoings have been accounted for.

Five years ago, the figure stood at 28 per cent. This means that, while the average British household had a net income after outgoings of £909.84 in 2003/04, now it is just £772.79.

Monthly household bills have risen 45 per cent in the past five years. They now account for 53 per cent of the average British household’s income, which is a 17 per cent increase.

The monthly cost of petrol has gone up by some 29.4 per cent to £193.61, while gas and electricity bills are £95.80 - a massive 110 per cent higher than in 2003/04.

Over the same period, there was a 44 per cent increase in debt repayments and a 25 per cent increase in council tax bills.


Ernst & Young director of retail Jason Gordon said: "Many UK consumer segments are clearly feeling the pinch as big rises in household costs are far outstripping relatively modest wage inflation.

“All consumers are painfully aware of the huge hikes in petrol and utility bills but we’ve also seen some fairly hefty price increases in pension contributions and debt repayments.”

The average monthly payments on a standard 25-year mortgage now stand at around £735 - a 78 per cent increase since 2003/04, according to the report.

Mr Gordon added: “If we go one step further and factor in food price inflation, which official figures have placed at 8.7 per cent in the last year, it’s clear that household budgets are under enormous strain."

Debt Management News posted on 01 August 2008

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