Price rises mean 34% now have less spare cash

UK disposable income is being bitten away by rising food, fuel and energy bills.

Some 34 per cent of people now expect to have less spare cash in the coming six months.

However, 55 per cent have taken action already, with some choosing to sell expensive items such as cars or jewellery, according to a poll by Alliance & Leicester.

The most common money saving measure was switching gas and electricity supplier, with 20 per cent changing firms.

Other ways of saving money included: new 0% credit card (12 per cent), changing current accounts (eight per cent), consolidating credit card debts into personal loans (seven per cent) and taking a second job (six per cent).

Some 42 per cent are now currently budgeting carefully and trying to live within their means.

People are also making changes to their everyday routine in order to save money including shopping around to get the best grocery deals (45 per cent), saving electricity by turning off lights (39 per cent), shopping in cheaper supermarkets (28 per cent) and using eBay or charity shops more often (25 per cent).

Emma Walkley, current account manager at Alliance & Leicester, said: "It is encouraging to see people are making positive changes to their spending and budgeting habits.

"This will hopefully stand them in good stead should they see their disposable income affected over the forthcoming months."

She added: "Taking advantage of the best financial deals on the market is always important, but more so in the current environment. We would advise people to take a good look at their finances and see how they can be improved.

"Often making simple changes like switching to a current account provider offering a better interest rate can make any belt-tightening feel a little bit easier."