Rising cost of living is biggest worry

The majority of families are worried about inflation, and four out of ten people say they are too overstretched to handle any increase in the cost of living, research has indicated.

The rising cost of essential items is the single biggest concern for families for the coming six months, with 57 per cent citing it as a worry, followed by redundancy at 45 per cent and unexpected expenses at 39 per cent.

Over the longer term, one in five families is concerned about the impact of rising interest rates on their mortgage, with home loan repayments accounting for about a fifth of the typical family's expenditure.

The study of 2,400 people commissioned by insurance firm Aviva found that many families were ill-equipped to handle a rise in outgoings, with 33 per cent having no savings.