Living costs crippling households
The rising cost of living over the past year has left an additional 1.3m households "struggling to make ends meet" with no money after they have paid their bills, it was revealed yesterday.
Some 12m of the UK's 21m households spend all their money on bills and debt payments, up from 10.7m nine months ago, according to a MoneyMood survey by Legal & General.
It means that 57% of households can not afford to save and "are budgeting on a fine balance between managing to pay bills and sinking into debt". That compares to 51% in September when the survey was last carried out.
The consumer prices index (CPI) measure of inflation has hit 4.5% in recent months - more than double the Bank of England's 2% target - after being driven higher by the rising cost of food, drink and fuel.
Mark Gregory, Legal & General's director of savings, said: "Persistently high inflation, higher fuel prices and rising food bills are clearly taking a toll on UK households.
"The continuing financial turmoil has created millions of households for whom saving has become almost impossible as they struggle to cover bills and debt repayments," he added.