The results of Asda’s latest Income Tracker survey were released this week. According to their figures, households had £11 a week less to spend in July than they did in June. Compared with July last year, there was a 6.4% drop in the amount of discretionary weekly income households have available to spend.

Figures from the AA indicate that there has been a 16.5% increase in the cost of travelling, and this will only get worse with rail fares set to increase by an average of 8% in January. Furthermore, the cost of food remains high, the cost of clothing and footwear has increased by 3.1% year on year, and utility bills have risen by 4.6% in the last 12 months.

Commenting on the latest survey, Asda’s chief executive Andy Clarke said that “the rising cost of feeding the family, getting around and increasing unemployment add up to the biggest squeeze on families since the last recession.” The report also noted that measures being taken to reduce spending include people only filling their petrol tanks halfway, and people cutting their own hair instead of paying someone else to do it.

Charles Davis, managing economist at the Centre for Economics and Business, said: “Pressure on household finances continued to mount up in July as the cost of essential spending grows rapidly while wage increases remain slow.” The think tank has slashed its own global growth forecast for the year ahead from 3.4% to 3%, suggesting the tough times are set to continue.

A new survey by Which? Mobile suggests that nearly 20 million people in the UK have never switched their mobile phone service provider. Which? also found that 5.3 million people had saved money by switching – that’s 48% of all adults who have switched in the past 2 years. This suggests that many of those who have always been with the same provider may be paying more than they need to.

Tom McLennan from Which? Mobile said: “With so many tariffs out there it pays to shop around, either through a comparison site or by checking out what different networks have to offer.”

26% of those who switched providers in the last 2 years were motivated to do so by a better tariff, whilst 16% did so to get a better handset and 14% wanted better coverage and reception.

The report from Which? Mobile also indicates that, when choosing a new phone, the handset’s features are the most important factor for pay monthly customers, whilst cost is the main concern for pay-as-you-go customers.

9 of 10 consumers still go high street phone stores to choose a new handset instead of using online comparison sites – Which? described this as “surprising”. The organisation also said reiterated its advice that people shouldn’t waste their money on handset insurance from their network operator as most home insurance policies will offer the same cover.

In an earlier survey, Which? found that Asda Mobile and Tesco Mobile were the best pay-as-you-go providers in terms of customer service. Tesco were the leading contract and SIM-only provider, followed by O2.

New research for the Consumer Credit Counselling Service (CCCS) suggests that 5 million UK households are at risk of facing debt problems due to a lack of savings. The research, which was carried out by the Financial Inclusion Centre, found that 4.3 million households have no savings whatsoever, and a further 1.1 million have less than £1k.

As we have been reporting over recent months, the cost of living has been rising sharply, and this has made it increasingly difficult for many people to meet all of their existing financial commitments. In situations where there are no savings to draw on and wages aren’t stretching till the end of the month, people are turning to payday loans and other forms of credit to keep them afloat. Many such cases will result in people being unable to repay the additional debt they have taken on, which can cause major problems.

27% of households without savings routinely depend on credit for essential expenditure, according to the Department for Business, Innovation and Skills. By comparison, only 9% of households with £1k – £10k in savings rely on credit in this way.

The CCCS cited inadequate savings as a major reason for people getting into financial difficulties. They advise people who have no substantial savings to avoid borrowing money, especially if they are already in debt. A spokesman for the charity said: “When you are struggling financially, it can be very tempting to borrow more so that you can simply make your payments to current debts. However this practice of robbing Peter to pay Paul almost always makes a debt situation worse.”

If you are already in debt and struggling to make ends meet, you may be able to benefit from debt consolidation or another form of debt management. Our team of experts can provide confidential advice on the most suitable course of action for you.

Financial information services firm Markit has released its monthly Household Finance Index, which shows that British households are seeing their finances decline more rapidly now than when the recession was at its peak.

Markit surveys over 2,000 households each month, gathering data on things like spending, savings, debt, job security, availability of and requirement for credit, and perceptions of inflation.

The latest report indicates that the spending power of UK households has fallen for 3 consecutive months, and is now at its lowest ebb since the first survey was undertaken in February 2009. Between July and August this year, nearly 40% of households saw their finances deteriorate. Less than 6% said their financial situation had improved.

Just 9% of respondents said they had been able to increase their savings, and 34% said their savings had dropped. 22% said their levels of debt had risen, compared with 17% who reported a reduction in the amount of money they owed. 24% believe their property has dropped in value, whilst 7% think their house is worth more now. In this climate, 50% of people are less willing to make a major purchase now than in the past.

Tim Moore, senior economist at Markit, said: “With a global economic slowdown and an escalating eurozone debt crisis lapping on the shores, it was unsurprising to see households’ appetite for major purchases reverting to its lowest since the start of the year.” He added that take-home pay had dropped more sharply in August than in any of the previous 9 months, and said the increasing cost of living had compounded the fall in disposable incomes.

If you are experiencing a deterioration in the state of your finances, don’t let things get out of control. Get debt advice from one of our specialists today.

New data published by LSL Property Services shows that rents in England and Wales rose for 6 consecutive months up to July, reaching a record average of £705 a month. The high cost of renting means that many people are finding it impossible to save money for a deposit on their own home in the future.

In the 12 months to July, London saw rents increase faster than anywhere else, with a 7.1% rise to £1,009 a month. There was also a 5.5% increase in the North East and a 4.8% increase in the Midlands. Wales was the only region where rents remained unchanged, with the average figure standing at £547.

In the current economic climate, many people can’t afford to buy a home, and this is inflating prices in the rental market. The situation for tenants seems unlikely to improve any time soon. Summer is traditionally the peak season for renters moving in, and this additional demand is pushing prices up even further.

As well as rents going up, the cost of living is rocketing, making it impossible for the majority of first time buyers to save money towards a deposit on a house. Young people are increasingly seeking financial help from their parents to help them get on the property ladder, and many require assistance just to afford the deposit on a rented property.

In this environment, many renters are opting for flatshares, which is often a cheaper alternative. Even in this sector, however, there are four tenants competing for every room, and, in the last month alone, rents have increased by 1.4%.

New research published by insurance company Saga shows that 1 in 5 people aged over 50 have cut back on the amount they spend on what they consider to be essential items, whilst 68% have reduced spending on non-essential items in an effort to save money.

The report, based on a survey of nearly 12,000 over-50s, identifies the rising cost of living as the primary concern for this age group, with income from pensions and savings following closely behind. Health was less of a worry for the majority of respondents.

Although the latest consumer prices index put inflation at 4.2%, the latest figures from the Office of National Statistics indicate that pensioners are experiencing an inflation rate of 6%.

The Saga Quarterly Report also shows that, of those in work, a significant proportion are increasing their hours or delaying retirement, whilst the number of 50-64-year-olds who have lost their jobs has also risen. Women were hit hardest by this, with a 9.5% increase in unemployment levels. 43% of unemployed respondents had been out of work for over a year, up from 30% in 2009.

Since the research was carried out, the stock markets have fallen sharply, causing pension funds to drop in value and annuity prices to rise. That means that those preparing for retirement will find their savings equate to a smaller pension income.

Pensioners could see a £278 reduction in their spending power over the next year as inflation surpasses interest rates, according to research undertaken by another insurance company – Prudential.

The financial crisis is affecting everyone, but these figures suggest that it may be pensioners who suffer the most.

New data published by the Council of Mortgage Lenders (CML) indicates that the number of home repossessions has fallen by 1%, from 9,100 in the first quarter of the year to 9,000 in the second quarter. However, some people in the industry have warned of an “arrears timebomb”, with disaster set to strike when rates rise in 2012.

Compared with the second quarter of 2010, the latest repossession figure represents a 7% fall. At this stage in 2010, there had been 19,500 repossessions, compared with 18,100 so far this year. The number of mortgages in arrears of 1.5% to 2.5% has increased, however.

Paul Smee, director general at CML, said that the stabilisation of mortgage repayment problems could be attributed to “stable employment and low interest rates.” He added that he felt there was no need to revise current forecasts in light of the current uncertainty in the global financial markets.

The Citizens Advice Bureau has reported that it has dealt with over 100,000 cases where people are in mortgage or secured loan arrears, and says that it has prevented 5,000 people from losing their homes in the past year. Gillian Guy, chief executive at the CAB, said: “With the cost of living going up daily and incomes lagging badly behind, mortgage lenders and the government must focus on helping people stay in their homes. Repossession is a terrifying prospect and should always be the last resort.”

If you do fall behind with your mortgage payments, you should always treat them as the top priority before paying back any other debts. Otherwise, you risk losing your home. Always contact your lender if you are expecting to miss a payment, rather than waiting for them to start threatening you with legal action. They may be willing to reduce your monthly payments in some circumstances.

Additionally, you should ensure you are receiving any benefits or tax credits to which you are entitled. The Government also operates a Mortgage Rescue scheme, through which you be able to sell your home but continue living there and paying rent. You can get more information on this from your local council.

If you are struggling to repay unsecured loans, credit cards or overdrafts, we can provide confidential debt advice.

A study carried out earlier this year claims that the average adult in their twenties plans to postpone many of the key stages I their lives, such as marriage, having children and purchasing properties.

The study revealed that the average couple back in 1985 would have spent £35,000 on property. This equates to four times the average annual salary. Today, a couple would be looking to spend £163,000 for the same property. This is eight times the national average for a twenty-something’s salary, which eliminates a huge number of people from getting a foot on the property ladder.

First Direct conducted a poll back in February of this year and of the 3,000 participants, 75% agreed that young people are, “the most financially pressured in history”. 20% either had or believed they had to postpone wedding plans, whilst 25% thought they would have to postpone having children due to lack of funds. Sadly, 1/3 of participants claimed that they were considering not having children at all because they would never be able to afford to raise a child.

In comparison, most of the parents of those questioned, never had to delay any key stage of their lives. The most significant barrier keeping many young people from planning for their futures is the difficulty of buying property. A typical parent of 45 would have married and had their first child at 26 and would have been on the property ladder by 27. Today, it is expected that the average age for a first time buyer would be more like 37, for people not supported financially by their parents.

A new report on consumer saving carried out by ING Direct shows that average household savings are lowest in Manchester, and highest in Chiltern, Buckinghamshire.

In central Manchester, the average household has just £569 in savings. Also in the bottom 5 are Hackney, Lambeth, Islington and Tower Hamlets (all London boroughs) – all those areas have average household savings of less than £780.

At the other end of the scale, the average household in Chiltern has savings of £15,712, closely followed by Mole Valley in Surrey, where the average is £15,435.

ING Direct began gathering their data at the beginning of 2009, and surveyed a total of 45,000 savers from around the UK. The report pointed out that savings aren’t simply a reflection of earnings – rather, the areas with the highest levels of savings tend to be home to an older population with few dependents, meaning they have had time to build up their savings.

The overall picture the report paints of savings levels in the UK is fairly dispiriting – it indicates that 26% of Britons don’t have any savings whatsoever. Additionally, in the last 3 months average savings per individual have fallen by £99 to £1,684, and since the start of 2009, there has been a 20% drop in average savings. This shows how people have had to dip into their reserves in order to cope with increased financial pressures in the current economic climate.

If you don’t have any significant savings, coping with debt problems can be particularly hard. Get in touch today to discuss how you could reduce your monthly outgoings.

For many people, the chances of getting a foot on the property ladder any time soon appear to be slim to none. However, there is a glimmer of hope for first time buyers, as ‘Rent to Buy’ schemes emerge. One building society in particular that has launched just such a scheme is the Saffron Building Society, which operates in the South of the country.

This particular scheme allows people to borrow if they can show that they have a record of paying rent, on time, for as little as 12 months. For Saffron Building Society, this would, in many cases, be proof enough that the borrower ids capable of making monthly mortgage repayments. In addition, the borrower would have to be able to place just a 5% deposit on the mortgage.

The arrangement would mean that someone who paid rent of £1,000 per month and was able to put down the 5% deposit would be able to buy property worth up to £155,000.

Many would-be first time buyers are unable to proceed with the purchase of property due to poor credit history. Although the borrower will still be subjected to credit checks, this scheme adopts a much more manual approach rather than the usual, automated system where you’ll be declined if there are any blemishes on your credit history.

Broker, John Charcol, has been quoted as saying:

“The common sense way affordability is calculated for this mortgage will be a breath of fresh air to any first-time buyer who has suffered from the ‘computer says no’ approach adopted by too many of the major lenders.”

Many households are paying rents equal to or more than they would pay on monthly mortgage repayments. Credit history and large deposits are the main factors keeping many people from making their way on to the property ladder. Schemes such as this make the property market far more accessible to first time buyers and will be welcomed with open arms by many people looking for alternatives to paying ‘dead rent’.