Average UK household can expect £100 monthly deficit by 2024

The average UK household will be short of £100 a month by 2024 as the cost-of-living crisis begins to see expenses outpace incomes.

Figures from Yorkshire Building Society’s Inflation Nation report revealed that weekly household spending is set to rise to £705 in just two years’ time.

However, the society’s report, which was conducted in partnership with the Centre for Economics and Business Research (Cebr), shows that real weekly incomes will rise to just £680 – leaving households short of £25 a week, or roughly £100 a month.

Yorkshire Building Society said its study seeks to understand how prepared adults across the UK are to cope with the cost-of-living crisis. It revealed that despite incomes remaining slightly higher than expenses in 2021 – £596 versus £595 respectively – the rising cost of living has already forced around four in ten savers (39%) to dip into their savings in the last 12 months.

Almost a quarter of those savers (23%) said they had dipped into their savings by between £200 and £499, while more than one in ten (12%) had done so by between £500 and £999. Almost a fifth (17%) said they had dipped into their savings by over £1,000.

“We may be emerging from the global pandemic, but our figures indicate we are moving from one crisis to another,” said Yorkshire Building Society’s interim chief executive, Stephen White. “Inflation is already high and this, coupled with increasing energy price caps and fuel charges, means there could be challenging times ahead for many households.”

Overall, around four in ten (41%) of the survey’s respondents said they expected their household outgoings to increase by between £101 and £500 each month over the next 12 months – with the areas causing most concern being utility prices (70%), food and drink prices (60%), and fuel prices (58%).

The society’s research showed that, housing and utilities costs are expected to reach £100.83 a week by 2024, up from £84.59 in 2021. Meanwhile, average low weekly transport costs due to some workers shifting to home-working throughout the pandemic are now set to rise by more than £40 a week or £170 pounds a month.

“Families across the UK are already having to budget carefully in order to make ends meet,” White added. “Some have accrued savings over the course of the pandemic, which can help foot monthly bills. Others simply do not have the financial resilience to withstand rising costs.

“Whatever people’s current financial situation, it is important they take action now in order to limit the damage the cost of living crisis could cause. Researching ways to cut costs and make the most of services available is paramount – even for those who may feel relatively resilient.”

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