Household bills ‘hitting consumers hard’

Consumers who have debts to pay may be finding it increasingly hard to do so because their other household bills have been rising.

A study by Santa…

Consumers who have debts to pay may be finding it increasingly hard to do so because their other household bills have been rising.

A study by Santander has found household bills have jumped by nearly twice the rate of Retail Price Index inflation in the last ten years (71 per cent to 38 per cent), with gas bills trebling and electricity doubling.

And during this time, incomes have only risen by 24 per cent.

Its poll found 29 per cent of Britons saying this has reduced their standard of living, with one-in-ten stating any more increases will be too much to afford, while 36 per cent said they could only manage by making more economies elsewhere.

Santander noted that the latest hike to hit consumers has been a 5.7 per cent rise in water bills.

Commenting on the situation, banking director at Santander Carlos Palacios said: "Times are tough for a lot of people at the moment and increasing household bills are one of the biggest causes of squeezed consumer finances.

"People have already been forced to make a number of adjustments to their lifestyle to cope with the hikes and many will struggle to cope with further increases such as the water bill hikes recently announced."

Those who have debts may find they are in particular difficulty, as cutting back on paying these is not a viable option.

For example, only paying the minimum on credit cards means more interest will be piled on in the longer run and those who also feel they need to spend on them to make ends meet could suffer from rising balances and bills they eventually cannot afford.

Another household cost set to hit householders is a rise in mortgage rates.

Consumer group Which? has revealed a poll on the issue shows 70 per cent of homeowners are worried about this, with a fifth saying they could not afford basic goods for everyday living if their bills rose by £100 a month.

By Joe White
 

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