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Cost of living 'becoming too much'

Wednesday August 25th 2010

New research has shown that the squeeze on consumers has tightened this month as workers' pay has failed to keep up with the rising cost of living.

In a survey carried out by YouGov and Markit, just 6% of those who took part in the poll said their finances had improved.

The research, which highlights the importance of getting mortgage payment protection, showed that almost a third (30%) of people reported a deterioration in their finances during the month.

The report said a combination of factors such as the sharp rise of goods and services, along with a fall in income from employment had contributed to the toughening conditions.

Worries that house prices were on the fall again, along with falling job security, particularly within the public sector, also played a part.

The findings were backed up by separate research from supermarket group Asda, which found that households' disposable income had dropped by 2.5% or £5 a week during the past year.

The group said the average family had only £175 a week left over to spend during July after meeting all of their essential outgoings, down from £180 in the same month of 2009.

It blamed the fall in income on the fact that pay rises had failed to keep pace with inflation, with average earnings rising at an annual rate of 1.6% in the three months to the end of June, while the latest figures on inflation show it was running at 3.1% in July.

Copyright © Press Association 2010

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