The percentage of people with no spare cash at the end of each month nearly doubled between 2022 and 2023, findings from Nationwide Building Society suggest.
The percentage of households with zero cash left at the end of the month rose from 11 per cent in 2022 to 21 per cent in 2023.
More than one in five, or 22 per cent, of households have less than £100 going spare at the end of the month, compared to just 13 per cent in 2021, Nationwide said.
Surging: The rising cost of energy bills has hit households hard, Nationwide said
The data reveals average monthly household energy bills increased by 63 per cent between 2021 and 2023, while monthly food and motor fuel costs have also increased by over 30 per cent.
Since 2021, average monthly mortgage repayments have jumped by 22 per cent, while average monthly rental costs have surged by 26 per cent, according to the research.
Saddled with sky-high living costs, 69 per cent of households are more worried about their finances and capacity to cope with ever rising costs.
Nationwide said the average amount of disposable cash left over at the end of each month had, on average, fallen from £328 in 2021 to £295 in 2022 and £237 at the end of 2023.
Average monthly energy bills came in at £126 in 2021, but rose to around £205 per month last year, the findings suggest.
Meanwhile, average monthly motor fuel costs are around 39 per cent higher than back in 2021, coming in at £121 per month in 2023.
Soaring food prices became a major issue in 2023, with food price inflation peaking at over 19 per cent in March 2023.
Average monthly food bills were £191 in 2021, £213 in 2022 and £253 last year, representing a 32 per cent increase during the period, Nationwide said.
Many supermarkets, like Sainsbury’s, Tesco and the Co-op, have bolstered their ‘loyalty pricing’ in stores, meaning only customers who are signed up to the chain’s membership scheme get certain lower prices on offer.
Last year, consumer group Which? alleged that Tesco and Sainsbury’s were using ‘potentially dodgy tactics’ on some of their loyalty offers to shoppers. Tesco and Sainsbury’s refuted the claims.
Mortgage rates increased significantly in 2023, before starting to slowly ease in the final quarter. Nationwide said average monthly mortgage repayments stood at £722 in 2021, £774 in 2022 and £880 last year, marking a 22 per cent increase over the period.
In 2021, average monthly rental costs stood at £693, before rising to £752 in 2022. In 2023, tenants faced a monthly rental cost of £869, representing a 26 per cent increase on 2021 levels.
Mandy Beech, director of retail services at Nationwide, said: ‘Despite the rate of inflation coming down, many households continue to feel the pressure as costs remain historically high.
‘Families have been hit particularly hard, with little spare money at the end of the month.’
There are, however, some signs of increased optimism among households.
Two thirds, or 67 per cent, of respondents said they had adapted either fairly well, or very well, to the cost-of-living crisis, and over 50 per cent said while things were tight, they were managing to meet their financial obligations.
The data was based on a survey of 2,000 people.
If you are struggling to keep up with monthly costs, it can be worthwhile giving your bank or building society a ring to see how they can support you.
With many struggling with high costs, all eyes will be on the Bank of England’s Monetary Policy Committee on Thursday as it holds its latest vote on interest rates.
Last month, voting by a majority of six to three, the Bank’s MPC left interest rates unchanged at 5.25 per cent for a third consecutive time.
Public expectations for inflation for the 12 months ahead fell to 3.9 per cent in November and to 3.5 per cent in December, down from 4.2 per cent in October, a survey by US bank Citi and market research company YouGov showed this week.
January shop inflation fell to its lowest level in nearly a year as the price of tea and milk fell and retailers offered heavy discounts to entice customers, new data published on Tuesday revealed.
Shop prices eased to 2.9 per cent higher than a year ago, down from 4.3 per cent in December, according to the British Retail Consortium-NielsenIQ Shop Price Index. This is the lowest since May 2022.
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