UK families have suffered the sharpest fall in the amount of cash available with them to spend for almost eight years due to high inflation and rising energy bills. The index, which measures households’ overall perceptions of financial wellbeing, fell from 44 in the third quarter to 40.1 in the last quarter of 2021, the lowest reading since the second quarter of 2020 when Covid-19 first spread.
A figure above 50 signals an improvement as opposed to a deterioration. According to a survey by the think-tank, the researchers found almost half (47%) were unable or just about managing to make ends meet each month, or had an income that varied much from paycheck to paycheck. With inflation at the highest level in a decade, ministers are coming under growing pressure to act on living standards ahead of an expected sharp increase in gas and electricity prices for British consumers from April.
As per the RSA study those living in financially precarious situations were far more likely to be worried about their mental and physical health. The researchers said young adults risked a tougher squeeze than other age groups as the government’s 'national living wage' for under-23s was lower than the headline rate of £8.91 an hour. The legal pay floor will go up to £9.50 from April for those aged 23 and over, while there will also be increases for those in younger age brackets.
