Fifth have no cash after bills paid

20/02/12

By Emma McFarnon

Britons' spending power has tumbled, to the point where almost one in five has no cash left over once essentials have been covered.

The findings came to light in the Lloyds TSB spending power report.

It found the proportion of people saying they had no spending power at all once their bills were paid rose from 15 per cent in December to a "worrying" 19 per cent in January. Those aged between 35 and 64 and those living in the North and Midlands were the most likely to say they had no discretionary income.

The report also found consumers are around £10 a month worse off than they were a year ago, as incomes have trailed behind soaring living costs.

In January some 43 per cent said they feel money is tight - up from 40 per cent in December.

And it's little wonder, because spending on gas and electricity rose by 9.3 per cent on a year ago, and water 13.6 per cent.

But despite being further squeezed, Britons are managing to repay more of their debts. Regular debt repayments such as mortgages, loans and credit cards rose by 1.1 per cent in January from a year earlier, reversing a previous decline.

Patrick Foley, chief economist at Lloyds TSB, said: "Despite more positive signs for the economy, many households are yet to feel any benefit, although this should change over the coming months."