Only 35% of working consumers believe that they have seen an increase in their household income over the past 12 months, according to the latest Lloyds Bank Spending Power Report.
In the monthly Ipsos MORI survey which looked at over 2,000 bank account holders in the UK, 36% of people reported that they had not seen a change in their household income, whilst 17% of people reported that they had experienced a decline in their income. Those “hit the hardest” were employees in the public sector (19%), those earning less than £35,000 (19%) and those under 35 (19%).
UK households have experienced additional pressure on their spending over the past 12 months, despite recent reports illustrating a decline in inflation and a year-on-year growth on average earnings. However, Lloyds Bank assessed its own customer accounts and revealed a 3% growth year-on-year on customers’ essential spending, with gas and electricity bills rising by over 5% year-on-year. This figure represents a seventh consecutive month of increased spending in the UK.
Lloyds Bank managing director Robin Bulloch commented: “Whilst consumers will have been pleased to see the gap closing between inflation and wage growth in February, our research shows that UK households still feel they have been under real financial pressure in 2018. Inflation remains high, and people are having to make their money go further as a result of muted household income growth. We would encourage consumers to actively manage their finances and keep an eye on their discretionary spending.”
According to the research conducted by Lloyds Bank, homeowners have experienced larger decreases over the past 12 months, with 23% of homeowners believing that it has decreased by more than 20%, compared to 16% of renters.
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