Living costs take toll on families

07/07/11

By Shane Gladstone

Research has suggested that a further 1.3 million households are struggling to keep their heads above water amid the soaring cost of living.

The MoneyMood survey by Legal & General found that from the 21 million UK households, 12 million are now left with nothing after paying their utilities and debts each month.

The figure has risen from 10.7 million nine months ago, according to the research.

The research suggests that saving cash is not an option for 57 per cent of households who "are budgeting on a fine balance between managing to pay bills and sinking into debt". This was up from 51 per cent of households last September.

Soaring food and fuel costs recently drove the consumer prices index (CPI) measure of inflation to 4.5 per cent – more than double the 2 per cent target.

Mark Gregory, Legal & General's director of savings, said: "The continuing financial turmoil has created millions of households for whom saving has become almost impossible as they struggle to cover bills and debt repayments."