Households are officially feeling the squeeze, with four in ten people having less than £6.60 per day to spend on themselves after paying the bills, according to a new report.
Across the UK, the average amount people have left over to spend on themselves on a daily basis meanwhile, is £13.22, according to the Nationwide Building Society findings.
With money tight, it’s easy to slip into the red – and a quarter of people regularly outspend their earnings, shelling out £101.84 a month more than they have on average, the report found.
The report, which surveyed more than 2000 people as well as analysing more than 700 million customer transactions, found that households are spending around £1510 per month on essential bills – which works out as around £87.80 more compared with a year ago.
Utilities and food are among the main essential costs people say they’ve seen increase over the past 12 months.
However, Nationwide found the cost of insurance has seen a modest fall year-on-year. On average, people spend £75 per month on general insurance to protect their home and car. Two-thirds (66 per cent) of people say they have reduced their outgoings to cover essential bills.
But cutting back hasn’t stopped people missing payments. Nearly a third (30 per cent) had missed payments in the past year, with utility bills, rent and insurance the most likely payments missed.
The findings suggest many people are shunning big payments and tending to buy what they need day-by-day or week-by-week, managing their money much more tightly.
The report found holiday spending in particular is an area people have cut back on – which could in part be due to the hot weather over the summer inspiring more people to have a staycation instead.
People may also be looking at other ways to cut holiday costs, such as choosing to go half-board.
The report found people spend £110 per month typically on leisure and entertainment, such as cinema trips and theme park visits.
While younger people are more likely to have a gym membership, they’re also more likely to be sensitive about how much they pay for this, the report found, opting for non-contract pay-as-you-go gyms.
Older generations are more likely to go for higher-end gym options, with extra facilities such as saunas and Jacuzzis.
On average, 18-24-year-old gym users spend £21.08 per month, compared with £39.30 for 55-64-year-olds, who were the biggest gym spenders.
So what steps can we take to make our money go further, and ease the squeeze on spending?
Guy Simmonds, Nationwide’s head of customer management for current accounts, says: “When things become difficult, we’d always advise sticking to a budget, shopping around for the best deals on your household bills, switching supplier to get the best value if necessary and, if you use a credit card, find one that offers 0 per cent interest on balance transfers and purchases.
“But make sure at least the minimum is paid off each month to avoid additional interest, and ensure you are able to pay off the costs in full by the end of the term.”