British families need to earn over 30,000 a year to pay basic living expenses, according to a new report.
The research by Skipton Financial Services shows that families, two adults with at least two children, need to bring home £24,801.51 a year after tax in order to pay for the cost of living. This sum increases to at least £30,000 a year before tax for a basic rate tax payer.
However, the authors warn that the figure, which is an increase on last year’s cost of living at £24,672.16 before tax, excludes any luxuries such as takeaways, nights out, weekends away or holidays.
The study, which analysed the spending habits of 2,000 UK parents with at least two children living at home, found mortgage repayments to be the biggest cost for families, which average at £4,515 a year.
Families reported that the cost of their weekly food shop has increased by £33, with many spending an average of £4,491 a year or £86 a week, along with the cost of commuting, around £2,672 a year.
Other payments which have gone up in the past year include filling a car with petrol at £2,688 a year, home insurance at £443 a year, and mobile phone bills.
In contrast, the cost of utility bills has remained the same as in 2011, while council tax and the cost of keeping a car have fallen.
The research also revealed that 60 per cent of families reported having less disposable income than last year, and six out of ten believe they willl end up paying out even more money on bills next year.
A third of respondents said they did not have a savings account and of those that do, only one in five are managing to save more money each month than last year.
Andrew Barker, managing director of Skipton Financial Services, said, ‘While there has been some change in spending habits this year compared to last, families are still paying out almost as much money on food shopping as they are on their mortgage payments.
'When we first carried out this research last year, we knew that people were feeling the pinch, with inflation riding high at 5 per cent and savings accounts paying rock-bottom rates. Unfortunately, despite inflation now nearer to the Government’s 2 per cent target, many families are still in exactly the same position as a year ago.’
However, the authors warn that the figure, which is an increase on last year’s cost of living at £24,672.16 before tax, excludes any luxuries such as takeaways, nights out, weekends away or holidays.
The study, which analysed the spending habits of 2,000 UK parents with at least two children living at home, found mortgage repayments to be the biggest cost for families, which average at £4,515 a year.
Families reported that the cost of their weekly food shop has increased by £33, with many spending an average of £4,491 a year or £86 a week, along with the cost of commuting, around £2,672 a year.
Other payments which have gone up in the past year include filling a car with petrol at £2,688 a year, home insurance at £443 a year, and mobile phone bills.
In contrast, the cost of utility bills has remained the same as in 2011, while council tax and the cost of keeping a car have fallen.
The research also revealed that 60 per cent of families reported having less disposable income than last year, and six out of ten believe they willl end up paying out even more money on bills next year.
A third of respondents said they did not have a savings account and of those that do, only one in five are managing to save more money each month than last year.
Andrew Barker, managing director of Skipton Financial Services, said, ‘While there has been some change in spending habits this year compared to last, families are still paying out almost as much money on food shopping as they are on their mortgage payments.
'When we first carried out this research last year, we knew that people were feeling the pinch, with inflation riding high at 5 per cent and savings accounts paying rock-bottom rates. Unfortunately, despite inflation now nearer to the Government’s 2 per cent target, many families are still in exactly the same position as a year ago.’
