Rise in expense ‘to tip Britons over the edge’

Many Britons are in danger of being unable to cope financially even if there is only a slight further increase in their bills.

This is according to…

Many Britons are in danger of being unable to cope financially even if there is only a slight further increase in their bills.

This is according to MoneySupermarket, which has carried out research revealing a fifth of UK adults now feel they have reached the 'tipping point' past which they can afford no more increases in their cost of living.

It also found a third of Britons would be pushed to breaking point if their bills rose by £50 a month and 80 per cent of households are now on a budget – no matter what their income.

Debt is increasingly becoming an ingrained part of the problem, as the study showed44 per cent of consumers are using credit to make it through the month, something that could have long-term repercussions as the interest piles up on overdrafts and credit cards.

The survey found 24 per cent of adults have increased their use of credit cards to help make ends meet during the past year, while 17 per cent have relied more on authorised overdrafts and 13 per cent have borrowed from friends and family.

Another cause of difficulty for consumers is low pay, with some not just being denied a pay rise, but actually having to take a pay cut, a fate befalling 12 per cent of those in work over the past year.

Personal finance expert at the site Clare Francis warned the situation may be about to get worse after Scottish and Southern Electricity (SSE) announced a nine per cent price rise for gas and electricity from October, suggesting other energy providers will follow suit.

She stated: "As news of rising costs continues to hit consumers, all the signs suggest that 2012 is set to be another tough year for many households with finances continuing to be pushed to the max."

Ms Francis advised consumers that good financial planning is essential when money is tight.

Responding to the SSE announcement, chief executive of Citizens Advice Gillian Guy said: "Further energy price rises will strike fear into the heart of many households."

Posted by Paul Thacker

 

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