Disposable income 'hit by price rises'

06/11/2008

Britons' disposable income has dropped by 30 per cent since 2006, Abbey Credit Cards has claimed.

According to the provider, just £1 of every £4 earned is left at the end of the month for the average household.

This leaves just £382 of disposable income - once tax, accommodation, utilities, food and transport costs have been deducted.

Abbey also said that around ten per cent of people have less than ten per cent of their salaries left in disposable income.

Rising inflation has been blamed for the trend - with the latest consumer price index hitting a 16-year high of 5.2 per cent.

The government's own target for annual price rises stands at just two per cent.

Commenting on the new report, EuroDebt director Kevin Still said: "Abbey’s figures for an average household suggest that the reduction in disposable income combined with the national average of £22,190 of unsecured debt, paying the minimum contractual payments, will leave virtually no disposable income.

"There is a very fine divide between manageable debt and unmanageable debt once large annual bills or unexpected costs are incurred that detrimentally impact a monthly budget with no contingency."

Tags; Income Worries and Debt, Young Family Finances, Recent Graduate Debt,

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