Households use 23% of monthly budget for bills

Households are spending 23 per cent of their disposable income on bills.

Research by Santander has discovered that food (9.7 per cent), utilities (6.9 per cent), council tax (3.6 per cent) and fuel (3.2 per cent) take up nearly one-quarter of people's monthly budget. This highlights how many people are having to spend a lot of money just to keep their house running.

Nearly 50 per cent of respondents said they have become more financially savvy in the past 12 months as a result of the rising cost of household bills. On top of this, 25 per cent of single parents say they would struggle to cope with future household bill price rises.

One option that many individuals are considering is to reduce the amount of energy they use and this is partly due to the recent hike in the cost of heating a home. However, during the winter months this could have negative connotations for the health of people.

Hetal Parmar, head of banking at Santander, said: "Rising energy price rises and the cost of living generally are putting extra strain on household finances, causing people to tighten their belts but also to become more aware of their finances.

"There are ways to save money, for example, by finding the best deals through comparison sites or making use of discounts offered by companies for paying bills by direct debit."

If people are struggling financially, then they should look to take control of the situation at the earliest possible opportunity. A debt management plan could be a good solution for people, as it offers them a way to reduce their repayments and freeze any additional interest that they might incur.

However, people need to remember they have to be diligent in the efforts to repay their money they owe. It is a serious financial undertaking that represents a great way for consumers to become debt free.

By Joe White