A recent report has indicated that many families and households are suffering real financial problems as a result of living costs, bills, and taxes rising at far faster levels than income. The report comes from the Centre for Policy Studies, and shows that the average household is paying nearly £8000 more in taxes than when Labour came into power.
Officials from the group also state that families have been left struggling with high levels of debt as a result of rising bills, costs, and taxes.
The data comes from the report entitled ‘Why Do We Feel So Broke?’ and suggests that since 2005 increases in disposable incomes have ground to a halt or even gone into reverse in some cases, whilst bills, taxes, and other costs such as petrol, energy, and good have continued to rise.
The report also stated that whilst disposable income stood at 71% of gross income in 1997, when Labour came into power, it has now fallen to 67%.
Many families have been struggling over recent months due to a range of financial strains that have affected disposable income levels. Energy prices have recently soared again due to increases in wholesale energy costs, food prices have been rising above the rate of inflation for some time, and petrol prices have rocketed over recent months. In addition to this the series of five interest rate rises between August 2006 and July 2007 have also affected family finances, with many households struggling to keep up with mortgage repayments.
Interest rates are expected to fall a couple of times before the middle of this year, which could ease the financial strain to some degree for some households, but at present these financial strains have resulted in the UK’s economy taking a serious knock.
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