Household finances stretched by rising living costs

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Household finances stretched by rising living costs

Mon 19th May 2008

Households are increasingly struggling to pay their bills as the cost of living rises, according to the Citizens Advice Bureau (CAB).

The organisation predicted that the situation is unlikely to ease in the near future. It noted that although mortgage repayments are likely to dip from 10.7 per cent of income to ten per cent by next year as interest rates fall, that is likely to be offset be by rising energy and food costs.

In addition, it expects gas, electricity, water, and council tax bills to increase.

Recent figures from Capital Economics, reported in the BBC, showed the share of household income spent on foods, bills and other unavoidable costs has risen by six per cent, to 31 per cent, over the past six years.

A spokesperson for the CAB said: "The combination of big increases in household bills, especially fuel, and rising housing costs is putting additional pressure on people's finances when in many cases they are already stretched to the limit."

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