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Household bills account for a quarter of spending


A report from PricewaterhouseCoopers (PwC) has revealed that over a quarter of household spending goes on energy bills, household costs and water, twice as much as 50 years ago.

This means we are now in the most trying time on record in terms of disposable income for households, as energy bills continue to rise and wages remain largely stagnant. The report highlights the fact that the average household now spends 26pc of income on essential bills, such as mortgage payments and energy.

Forecasts are also bleak, with PricewaterhouseCoopers predicting that by the year 2030 the amount we will have commit to household bills will have risen to 30pc of total income, with a 2.4pc rise next year alone.

John Hawksworth, chief economist at PwC, said: “The economy has been picking up, employment growth has been pretty strong as well. But real earnings are still going down because of inflation. We believe real earnings will fall again in 2014 which will mean that they have fallen for six consecutive years – that’s pretty much unprecedented. We have never had such a long run as that”.

In October we learnt that many of the largest energy firms in the UK were once again rising prices at an inflation-busting rate, while water regulator Ofwat, is considering allowing Thames Water a one-off increase of £29 to customers’ plans.

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