The financial outlook which Britons face grows increasingly bleak.

Such is the assertion of uSwitch where recently released figures point to a picture of financial doom and gloom. According to research by the price comparison site, the average amount of disposable income which Britons now enjoy stands at 14,520 pounds. Such a figure marks a decrease of 15 per cent from studies carried out this time last year. Furthermore, the amount of money which consumers have after meeting various spending commitments is now at its lowest level since 1997.

The drop in the amount of disposable money available was attributed to dramatic increases in essential spending costs. One such area to have seen an increase is the price of gas, which has gone up 28.3 per cent during the last 12 months. Meanwhile, the official inflation rate of food was revealed to stand at 13.7 per cent. And although the fact this is a 28-year high may be enough in itself, certain areas of produce were shown to have particularly hiked in price. Among these were dairy goods and meat which have surged by 19 and 16.3 per cent respectively. TV licenses, electricity and education costs were also shown to have gone up, with building insurance increasing by 4.5 per cent since 2007.

With such falls in disposable income and surges in living costs over recent months, it is likely that people could find that as more of their money is spent on the essentials, their ability to keep up with borrowing commitments – such as personal loans and credit cards – comes under increased strain.

The study also showed that difficulties with disposable income could be felt most keenly by those in the north-east of the country, with people from Newcastle said to have the highest proportion of their income taken up by essential household areas. Those in the city were revealed to be putting more than three-quarters of their income (76.8 per cent) towards crucial spending commitments with a remaining disposable income of 4,836 pounds. Hull came second on the list of places in Britain with the least amount of disposable cash, as its residents spend 65.5 per cent of their annual salary on the essentials, with Sunderland also in the top ten chart. On the other hand, Watford and Cambridge were shown to be among the places with the highest levels of disposable income in the UK.

Figures from the price comparison site also showed that income tax and National Insurance rates have risen by six and 4.6 per cent respectively since 2007, while this year has also seen a fall in average house prices; the first time that this has taken place since 1992.

Ann Robinson, director of consumer policy for uSwitch, said: “Consumers are in a lose/lose situation where everything is shooting up except their income. The shock increase in the consumer price index – which has more than doubled in the last six months to over twice its official target – will impact everyone this year. It’s a catch 22 situation – struggling consumers need pay rises to help them meet the mounting cost of living, but the Bank of England and the government wants to keep pay rises to a minimum to dampen inflation. People now have less money in their pockets than at any point since 1997 and British consumers are facing an autumn of discontent.”

Consumers worried about their ability to manage their money over the coming year might wish to consider taking out a debt consolidation loan. By applying for this kind of loan borrowers may be able to merge various spending commitments into a single low-cost monthly repayment. This could prove to be of particular financial assistance for those struggling with spending after a recent study by Gocompare showed that 60 per cent of Britons view reducing their outgoings and cutting back on loan and credit card debts as their main financial priority for the next 12 months. It was also revealed that 49 per cent of people are either very concerned or concerned about their current monetary situation.

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