An increasing amount of people are finding it difficult to make ends meet in the current economic climate and are now worrying more about their daily …
An increasing amount of people are finding it difficult to make ends meet in the current economic climate and are now worrying more about their daily living costs than their health.
This comes from new research by uSwitch, the independent price comparison and switching service, which found that people are struggling to come to terms with the cost of running a household. The data shows that over the last five years, household expenses have risen by a quarter (25 per cent).
Some bills have skyrocketed since 2008, with car insurance being the largest culprit. The cost of insuring a vehicle has risen by 67 per cent, which is severely hurting people on low incomes who rely on a car to get to work. The average cost to insure a car in 2008 was £684 a year, but this has leapt up to an unbelievable £1,140 a year by the end of 2012.
Petrol price hikes have not helped matters either, with the price of filling up the tank rising by 33 per cent since 2008 – it now costs a two car family £331 a month to fuel their car. The AA has predicted there will be further rises before Easter.
For many people public transport is not an option as their workplace is in an area where busses and trains do not serve. This forces them to pay the high costs of running a car, on top of everything else in their lives.
Energy bills have also increased considerably, with gas and electricity rising by 52 per cent and 32 per cent respectively over the last five years.
These figures are worrying because pay has only risen by a meagre six per cent over the same period of time, according to Office of National Statistics figures, which showed that average gross pay was £24,900 in 2008 and by the end of December 2012 had only reached £26,500.
Naturally, this means that people have a lot less to spend and are finding themselves spiralling into debt as they attempt to keep on top of everything. Due to this, people are now more worried about their finances than they are about their health.
With these increases in household expenses, more people are getting themselves into credit card debt and are dipping into their overdrafts to cover the cost of bills.
Personal finance expert at uSwitch Michael Ossei said: "With salaries failing to deliver, many are being forced to turn to debt just to stay afloat."
"Consumers also need to help themselves by not burying their heads in the sand and realising that there are options open to them. The first step is to take a long hard look at your household budget to see where you can cut costs," he added.
With the Budget coming up, people are now calling on chancellor George Osborne to address the cost of household bills before he moves on to tackling the economy at large. With high household costs, people have less to spend, which could significantly hurt the GDP of the UK.
By Amy White