British families ‘yet to face financial reality’

Financial services firm the Alliance Trust reports that real earnings across the country are at their lowest level in a decade, but household spending is yet to be reigned in by millions of families.

Pressure is being put on household finances for a variety of reasons, most notably the increasing repayment levels for mortgage borrowers and the rising council tax rates, Alliance Trust suggests.

“Our objective look at the many financial components facing today’s households remains fairly bleak,” said Shona Dobbie, Head of Alliance Trust Research Centre.

“Homes are still being squeezed by lower real earnings growth at the same time as they face higher mortgage payments and council taxes,” she added.

A report from the Consumer Credit Counselling Service earlier this year predicted that debt management problems would put millions of British homeowners “on the rack” financially throughout 2007.