Research has shown that households across the UK are paying treble the amount of inflation on food than the average across the G7 nations, as the prices outstrip the general cost of living.
And with food prices overstretching threadbare pockets, the cost of fuel has climbed to record highs and unemployment has risen, meaning an increasing number of individuals are being forced to borrow money to pay for basic living essentials.
Despite the recession officially being over, homes all over the UK have continued to feel the financial squeeze, with the effects of the austerity measures dampening economic growth and making employment more difficult to find. Figures have shown that the typical household income has not kept pace with the rate of inflation, meaning that the majority of Brits have suffered a heavy drop in disposable income in recent months.
The Office for National Statistics reported that the unemployment rate hit 8.4% in the last quarter, the highest level seen in the UK in 16 years. Younger Brits are being forced to bear the brunt of the job drought, with as many as 22% of 16-24 year olds unable to find employment.
As well as rising unemployment, people across the UK have had to contend with a drop in disposable income. The Bank of England has estimated that every household has lost an average of £552 over the past year, with income falling by 3.5%. The simultaneous increase in the cost of utility bills and other living essentials has meant UK families have had to absorb a drop in disposable income for the fifth year in a row.
The figures have also revealed how inflation has continued to cripple the UK, which, despite hanging on to its AAA credit rating, is fighting to keep the cost of living under control. France, Italy, Germany, Canada, USA, Japan and the UK make up the G7, but the average rate of inflation is just 2.1% for food across the group, compared to a staggering 6.3% in Britain. In Holland, food inflation is at just 0.8%, whilst in France, households are only suffering a 0.1% hike in the cost of their meals.
The average weekly spend in the UK has now reached £473.60, with transport taking the biggest chunk, more than housing, fuel and power combined.
A study found that the average home in the UK spends £64.90 every week on transport, a whopping 14% of total income available. Housing, fuel and power came in second, with a combined cost of £60.40, closely followed by recreation and culture at £58.10. Food and non-alcoholic beverages were next on the list, with the total cost £53.20 each week, despite many people shopping around for the best deals and eating out next, at £39.20. Alcohol and tobacco took up just £11.80 of the weekly allowance.
Debt experts have said that it is possible to save a significant amount on household expenditure without having to sacrifice any more. Measures such as switching off electrical appliances rather than leaving them on standby can cut an electricity bill by 6-10% and turning down the thermostat by 1 degree can slice a hefty 10% off heating costs.
When finances are squeezed, paying out more money is usually the last thing most people consider but getting windows doubled glazed can save a third on heating costs. Making sure your car is serviced regularly is another way to minimise unexpected problems caused by poor maintenance.
And whilst everyone has to eat, it is possible to cut down on the food bill without resorting to a diet. Taking a packed lunch to work means not only saving more than half your usual spend, but also allows you to pick what to eat, rather than having to make do with what you find either in the shops or work cafeteria.
Take a look at the Baines & Ernst Infographic to find out how the recession is affecting families in the UK.