Rising cost of living reduces households’ financial well-being | business news

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Soaring energy bills and fuel prices as well as higher food costs have been pushing inflation up and households face a further financial headache from rising interest rates – meaning bigger monthly mortgage and loan repayments – and National Insurance hikes. The reading is the latest sign that families are feeling the squeeze from higher prices, with inflation at a ten-year high of 5.1% and expected to climb to 6% by the spring, a level not seen for three decades. Findings from the Scottish Widows survey showed the amount of cash consumers had available to spend fell at the sharpest rate for eight years.

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Why are your bills going up? It was the biggest deterioration in the index – where the 50-mark separates improvement from worsening in the household’s financial situation – since the second quarter of 2020.

Please use Chrome browser for a more accessible video player 2:37 Meanwhile there was a renewed increase in demand for unsecured credit, such as overdrafts and credit cards – even as the availability of this declined.

The report said only the highest earners added to short-term savings pots while lower earners struggled to put money aside. Savings also faced a squeeze while there was a slight reduction in income from employment.

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