Families squeezed as household bills rise 25%

ESSENTIAL household bills, including food and fuel, have risen 25 per cent in the past five years, leaving people more concerned about living costs than their health, according to a report published today.

The cost of car insurance, gas, electricity and petrol have seen the biggest increases at 67 per cent, 52 per cent, 32 per cent and 33 per cent respectively, while wages climbed just six per cent over the same period, the figures from uSwitch showed.

Average rent rises of 24 per cent and food-price increases of 17 per cent are also contributing to what the report calls “unprecedented levels of pressure”. 
According to uSwitch, consumers are now spending an average of £1,544 a month on essentials such as food, fuel and basic living costs – compared to £1,237 spent on average in 2008.

Seventy-one per cent say their financial situation has worsened since the 
coalition came to power. The report, published ahead of next week’s Budget, found that consumers believe Chancellor George Osborne should deliver measures to alleviate the pressure on household budgets.

More than half (58 per cent) say they think the Chancellor’s priority should be to tackle rising utility bills, while half of those questioned argue that reducing petrol price would ease budget pressure.

Last night, Labour’s shadow energy minister, Tom Greatrex, said reducing the cost of energy bills must be a priority for the Chancellor.

“With fuel bills up by nearly £300 in the last two and a half years it is no surprise that hard-pressed consumers in Scotland want the government to provide the support they need.

“It beggars belief that there is nothing in the government’s energy bill to break the dominance of the energy giants or protect vulnerable customers from being ripped off.”

There was little expectation among those questioned that the Chancellor’s Budget will offer solace to consumers. Eight out of ten of the 2,016 adults polled claimed Mr Osborne is out of touch with the concerns of ordinary people.

“Consumers are anticipating next week’s Budget with a mix of dread and despair,” said Michael Ossei, uSwitch personal finance spokesman. “Spiralling living costs are stretching household budgets to their absolute limit and people are running out of ways to fund ever-increasing bills.”

Margaret Mitchell, Conservative MSP for Central Scotland, called for tax cuts to help households cope with rising costs. She said: “Most families are trying to reduce their overheads. People are under severe financial pressure.

“Tax reductions in the Budget would be a way to try to get more money in people’s pockets at a time when energy bills are going up and everyday living is becoming more and more expensive.”

Tavish Scott, Liberal Democrat MSP for Shetland, said: “The government has to get the economy sorted so that there are more jobs available and more security for those in work. That security would ease the pressure that more and more Scottish families are facing.”

A Scottish Government spokesperson said households across Scotland are benefiting from a continued council tax freeze, concessionary travel and free prescriptions.

He said: “The Scottish Government is doing everything it can with our current powers to protect households, business and front-line services.”

The uSwitch study found that the greatest concern consumers faced was the rising cost of living, with 55 per cent putting it at the top of their worry list, compared with 29 per cent whose primary concern was their health.

Two fifths (39 per cent) worry they do not have enough money and almost one fifth (18 per cent) worry about job security.

Against the backdrop of rising bills, wages are struggling to keep up. Average salaries have risen 6 per cent from £24,900 a year in 2008 to £26,500 at the end of 2012.

Just over half of consumers (52 per cent) have had a pay rise this year, but more than one in three (36 per cent) have had their pay frozen and one in eight (13 per cent) have had a pay cut.

Liz Gardner, head of policy for Working Families, said the uSwitch data showed the pressure families were under.

She said: “The uSwitch report shows many families are facing stagnant or even falling wages. Unsurprisingly, work doesn’t pay if essentials like childcare costs and travel costs are rising and wages aren’t keeping up.

“Families face impossible choices and sadly high childcare costs are forcing some out of employment, or acting as a barrier to getting back into work. “

Citizens Advice Scotland Policy Manager Keith Dryburgh said: “These figures are worrying, but sadly they’re not surprising. They certainly reflect the evidence that what we see every day across Scotland, where we’ve seen a doubling of the number of people relying on food banks just to get by, and a 39 per cent increase in benefits enquiries over the last five years.”

Paul Lawler of Moneysupermarket said: “Rising costs are a problem for all UK households – whether people are an a low or a high income.”

Last night, RAC technical director David Bizley said the high cost of fuel was a particular concern in Scotland. He said fears over prices at the pump were having a slowdown effect on the economy as a whole, adding: “The price of petrol and diesel has become a real burden on household budgets so much so that there has never been a more expensive time to be a motorist.”