According to research figures released today, families are an average of £5 a week worse off this year following soaring petrol and food costs.

After meeting all essential costs such as food, clothes, housing bills and transport the average household had just £138 a week left in January. The amount of money families had left for unrestricted spending was 3.2% lower than in January last year - the equivalent of £5 a week despite average earnings being 21 a week higher.

The cost of living has jumped by 4.9% with the average household now spending £388 a month on essential items with the biggest increase in petrol which soared by 19% to reach 103.9 a litre during January. This contributed to a 6.4% rise in transport costs whilst food prices were 6.1% higher than a year ago as the ongoing demand for biofuels pushed up the price of basic ingredients. However, some of the rise in the cost of household essentials was offset by a 4.8% fall in the price of clothes but even discounting during the January sales was not enough to offset the rising cost of living.

On average, households had an average of £653 coming in each week during January on which they paid £127 in tax, leaving them with £526. Although earnings were 3.8% higher in January than the previous year, taxation remained high leading to a rise of just 2.6% in people's take home pay. The amount paid in income tax and National Insurance rose by 7.8% during the year probably due to more people falling into the higher income tax bracket.

People living in London saw the smallest fall in their disposable income with their spending power dropping by just 1.8% to £209 whilst people in Wales were the worst hit with their disposable income averaging just £45 a week.

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Article referenced from http://www.gm.tv/index.cfm?articleid=28637