Families 'will have £7,000 less to spend in 2011-2015'
Published 2 July 2012
With the economic crisis showing no signs of easing, new figures indicate that families will continue to face a 'ferocious squeeze' on their money for years to come.
The average UK family will have around £7,000 less to spend between 2011 and 2015, as their bank balances continue to feel the effects of lower wages and rising unemployment, This is Money reports.
House of Commons analysis, based on official Government figures, highlights the ongoing pressures on households' finances, with the rising price of food, fuel and energy putting a 'ferocious squeeze' on many families' budgets.
In 2011, the average family's disposable income in the UK was £800 down compared with the previous year. That's a figure 'in real terms', meaning it takes inflation into account.
However, by 2015, this amount is set to more than double - hitting £1,700 per year. Since records began 64 years ago, real disposable income has increased almost every year. But in the current economic climate, research shows that people actually have less money to spend on non-essentials.
Moreover, it doesn't appear that things will be improving any time soon. Bank of England Governor Sir Mervyn King recently warned that Britain is not yet halfway through the economic crisis - with five years of hardship ahead.