Cost of living has soared 26 per cent in two years, insurer says
Brits hit by 26% hike in living costs
Friday, 20 Jun 2008 00:01
Brits have been hit by a 26 per cent rise in the cost of living over the last two years as everyday bills creep up, according to Combined Insurance.
The insurer's cost of living tracker, which follows monthly spend on living costs, shows the cost of average monthly commitments has soared by 26 per cent since June 2006.
Brits are spending 77 per cent more on child care costs and up to 30 per cent more on everyday bills such as TV subscriptions and water rates, Combined Insurance said.
The results show that people's average monthly outgoings have risen from £945 in June 2006 to £1,281 June 2008.
Nigel Brittle, director at Combined Insurance, said: "The many cost of living hikes are taking their toll on the monthly budget and many Brits are living on the edge with their finances.
"As Britons prepare to make cutbacks on their spending, which may include cutbacks on various insurance commitments, Combined Insurance urges the public not to cancel insurance policies designed to protect incomes in hard times or in bad health."
In London, those hit the hardest by costs in the country, people are spending 55 per cent more of their household income each month on bills. The south is the second hardest hit region (38 per cent increase) followed by Scotland (32 per cent), the Midlands and west (27 per cent) and the north (24 per cent).
The rise in costs as measured by the consumer price index (CPI) puts inflation at 3.3 per cent in May, although people's perception of inflation is much higher, at 4.9 per cent, according to the Bank of England.
Consumers are cutting back on their spending to cope with the increase in costs, the Confederation of British Industry said in May, with the service sector faring the worst from the slowdown.