Report: Families £8 a month poorer

Families are £8 a month worse off than they were a year ago as the pressure on their finances tightens its grip, a report has found.

Sluggish growth in household incomes has driven the deterioration, with the amount of cash people have coming in increasing at its weakest rate since December 2010, Lloyds TSB's spending power report for September found.

Incomes grew by 1.7% annually, while spending on essential items grew at a faster rate of 3.3% year-on-year, with spending on gas and electricity bills up by 8% on a year ago.

Households are set to come under further pressure after both British Gas and Npower announced price hikes on Friday. Concerns have been raised by consumer groups about how vulnerable families and the elderly will cope, with food and some mortgage costs also on an upward march.

Lloyds TSB's latest study comes after its research for August suggested that the pressure on consumer spending power might be easing. It said that recent distractions such as the Olympics and the wet summer weather may have produced some "volatility" to the findings.

Patrick Foley, chief economist at Lloyds TSB, said: "Despite the volatility in the data, it is clear that the underlying trend in real incomes is negative despite the fall in inflation from last year's high. I expect inflation to fall only slightly further over the coming months so any improvement in the situation will need to be driven by growth in incomes and this will depend on the wider economy. The pattern of consumers following rather than driving economic developments appears set to continue."

The proportion of people surveyed who felt the UK's economic situation was "not at all good" increased on the previous month to 45% in September, although this is still four percentage points lower than a year ago.

Looking to the next six months, the study found that many people are continuing a trend seen over the last year of becoming slightly more optimistic about the state of their finances.

However, overall more people still believe they will be worse off than better off in six months' time.

The report measures payments into Lloyds TSB current accounts and subtracts essential spending on regular payments such as mortgages, rent and utility bills to calculate people's left-over income or spending power. It also regularly asks more than 2,000 people about their spending habits.

Comments (11)

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10:32am Mon 15 Oct 12

Sankey says...

Part of the reason is energy bills paying for the green windmill nonsense that was one of the justifications of npower. And if you heard the british gas spokesman justifying their 8% rise it was he said without the rise we cannot investment in green infrastruture. By the way global tempertures have been cooling for the past 16 years.
Part of the reason is energy bills paying for the green windmill nonsense that was one of the justifications of npower. And if you heard the british gas spokesman justifying their 8% rise it was he said without the rise we cannot investment in green infrastruture. By the way global tempertures have been cooling for the past 16 years. Sankey

4:30pm Thu 18 Oct 12

anthonywilson says...

I suspect that the Osborne and Cameron families wont be £8 a month worse off.
I suspect that the Osborne and Cameron families wont be £8 a month worse off. anthonywilson

7:56pm Thu 18 Oct 12

frankly says...

We are all tightening our belts because of governments not having a clue..Get out of Europe for starters, we coped before and we will again.
We are all tightening our belts because of governments not having a clue..Get out of Europe for starters, we coped before and we will again. frankly

12:34pm Fri 19 Oct 12

Sankey says...

The reason we are in this mess is the Tories. It was just fine when they took over Gordon Brown left them a golden inheritance.
The reason we are in this mess is the Tories. It was just fine when they took over Gordon Brown left them a golden inheritance. Sankey

4:46pm Fri 19 Oct 12

pitbullboxing says...

I know sankey I hope they get back in so we can borrow our way out of trouble.
I know sankey I hope they get back in so we can borrow our way out of trouble. pitbullboxing

12:04am Sat 20 Oct 12

frankly says...

Well things must be tight for George Osbourne, trying to travel first class on a standard rail ticket..Cant wait for monday in parliament..lol
Well things must be tight for George Osbourne, trying to travel first class on a standard rail ticket..Cant wait for monday in parliament..lol frankly

3:13pm Sat 20 Oct 12

annie1275 says...

Well we are more than £8 a month worse off.With the price increase on food, petrol,council tax,and on top of that no pay rise at work for the third year running.
Well we are more than £8 a month worse off.With the price increase on food, petrol,council tax,and on top of that no pay rise at work for the third year running. annie1275

8:34pm Sat 20 Oct 12

Sankey says...

Marie Rimmer deliberately (and unnecessarily) put up St Helens council tax at the last review so she obviously thinks we all have money to spare to chuck at the council. So what is everybody moaning at? Hike it up again Marie we are all rolling in it.
Marie Rimmer deliberately (and unnecessarily) put up St Helens council tax at the last review so she obviously thinks we all have money to spare to chuck at the council. So what is everybody moaning at? Hike it up again Marie we are all rolling in it. Sankey

4:18pm Sun 21 Oct 12

mikeperry109 says...

annie1275 wrote:
Well we are more than £8 a month worse off.With the price increase on food, petrol,council tax,and on top of that no pay rise at work for the third year running.
Nothing changes Annie, which ever party is in power. The rich are protected and allowed to avoid their taxes, the poor remain so. Time for the revolution - and I am serious!
[quote][p][bold]annie1275[/bold] wrote: Well we are more than £8 a month worse off.With the price increase on food, petrol,council tax,and on top of that no pay rise at work for the third year running.[/p][/quote]Nothing changes Annie, which ever party is in power. The rich are protected and allowed to avoid their taxes, the poor remain so. Time for the revolution - and I am serious! mikeperry109

7:07pm Sun 21 Oct 12

saintsfan says...

Well, unemployment has been falling (nationally) month on month all year, inflation has gone down, government borrowing has gone down (which means there will be less added to that massive Labour debt we have to get down) and the economy is growing again, albeit not by a vast amount. Therefore the government must be doing something right. All the indicators are going in the right direction. Even this report states that due to the Olympics there may be some volitility so in other words it's pretty much admitted to the data not being very accurate. Labour and the Labour council of St Helens would hate for us to be actually coming out of recession and starting to grow again as that would mean the coalition government was right to take austerity measures (although we're not exactly Greece). Perish the thought that being responsible when in massive debt is the right way to go!
Well, unemployment has been falling (nationally) month on month all year, inflation has gone down, government borrowing has gone down (which means there will be less added to that massive Labour debt we have to get down) and the economy is growing again, albeit not by a vast amount. Therefore the government must be doing something right. All the indicators are going in the right direction. Even this report states that due to the Olympics there may be some volitility so in other words it's pretty much admitted to the data not being very accurate. Labour and the Labour council of St Helens would hate for us to be actually coming out of recession and starting to grow again as that would mean the coalition government was right to take austerity measures (although we're not exactly Greece). Perish the thought that being responsible when in massive debt is the right way to go! saintsfan

9:40pm Sun 21 Oct 12

chasmcn says...

saintsfan wrote:
Well, unemployment has been falling (nationally) month on month all year, inflation has gone down, government borrowing has gone down (which means there will be less added to that massive Labour debt we have to get down) and the economy is growing again, albeit not by a vast amount. Therefore the government must be doing something right. All the indicators are going in the right direction. Even this report states that due to the Olympics there may be some volitility so in other words it's pretty much admitted to the data not being very accurate. Labour and the Labour council of St Helens would hate for us to be actually coming out of recession and starting to grow again as that would mean the coalition government was right to take austerity measures (although we're not exactly Greece). Perish the thought that being responsible when in massive debt is the right way to go!
the IMF forecast for growth in 2013 is -0.4 we have a blip the figures due to the Olympics which also boosted the jobs too i noticed you say nationally as in the north west its not too good. The rowntree trust say that over 200 people are casing every christmas job in retail this autumn.Osborne will miss his target by £174,900,000,000 by 2015 thats with his austerity as he has sucked the blood out country . look the figures up and dont be fooled by right wing media believing that the tories know how to run a economy .We are no near out the woods yet, Lord Turners speech last week was interesting i had wondered were all the QE money had gone too as its not being loaned out to business, the banks are clearing the debts that they hold on their books but they are massive with not enough money in the world to clear them so no growth available from them you see to get growth you have to have debt . So pay people a decent wage you get growth and the debt goes down but the banks get poorer as the poor don't need to borrow to exist .

Like Mike says above we need a revolution for the last 35 yrs all govts have pandered to the rich in that their wealth will trickle down to the rest of us ,they have privatised every thing going ,given tax cuts to millionaires ,slashed corporation tax to companies that at this moment they are sat on 750 Billion pounds waiting for the good times they subsidise these companies with allowing them to pay low wages so the welfare budget is massive that people need benefits to pay the rent with "no word about rent control "so having to borrow more which ends up in the pockets of the rich in tax havens .and finally they allowed the banks to print their own money by deregulation so things do need to change is their any body out there to do it ?
[quote][p][bold]saintsfan[/bold] wrote: Well, unemployment has been falling (nationally) month on month all year, inflation has gone down, government borrowing has gone down (which means there will be less added to that massive Labour debt we have to get down) and the economy is growing again, albeit not by a vast amount. Therefore the government must be doing something right. All the indicators are going in the right direction. Even this report states that due to the Olympics there may be some volitility so in other words it's pretty much admitted to the data not being very accurate. Labour and the Labour council of St Helens would hate for us to be actually coming out of recession and starting to grow again as that would mean the coalition government was right to take austerity measures (although we're not exactly Greece). Perish the thought that being responsible when in massive debt is the right way to go![/p][/quote]the IMF forecast for growth in 2013 is -0.4 we have a blip the figures due to the Olympics which also boosted the jobs too i noticed you say nationally as in the north west its not too good. The rowntree trust say that over 200 people are casing every christmas job in retail this autumn.Osborne will miss his target by £174,900,000,000 by 2015 thats with his austerity as he has sucked the blood out country . look the figures up and dont be fooled by right wing media believing that the tories know how to run a economy .We are no near out the woods yet, Lord Turners speech last week was interesting i had wondered were all the QE money had gone too as its not being loaned out to business, the banks are clearing the debts that they hold on their books but they are massive with not enough money in the world to clear them so no growth available from them you see to get growth you have to have debt . So pay people a decent wage you get growth and the debt goes down but the banks get poorer as the poor don't need to borrow to exist . Like Mike says above we need a revolution for the last 35 yrs all govts have pandered to the rich in that their wealth will trickle down to the rest of us ,they have privatised every thing going ,given tax cuts to millionaires ,slashed corporation tax to companies that at this moment they are sat on 750 Billion pounds waiting for the good times they subsidise these companies with allowing them to pay low wages so the welfare budget is massive that people need benefits to pay the rent with "no word about rent control "so having to borrow more which ends up in the pockets of the rich in tax havens .and finally they allowed the banks to print their own money by deregulation so things do need to change is their any body out there to do it ? chasmcn

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