49% believe finances will get worse

HOUSEHOLDS across the UK have seen their finances squeezed, with those in the lowest income bracket most affected, according to a new report.

The Markit Household Finance Index (HFI) showed that 38 per cent of people believe their finances have got worse this month in the run up to Christmas, with just 7 per cent saying they were in a better position than they were in November.

Almost half of people said they expected their financial situation to worsen in next 12 months, with households in Scotland among the most pessimistic about the future.

A survey of 1,500 people across the UK showed 49 per cent of people expected things to get worse over the next year and just 23 per cent expect it to get better.

Tim Moore, senior economist at Markit, said: “December’s survey rounds off a year in which the aftershocks of the recession have hit UK household finances with unprecedented force.”

He added: “Things are expected to get worse before they get better, with more than twice as many households downbeat about their financial prospects for 2012.”