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Living costs 'rising eight times faster than wages for poorest 10%'

By Daniel Culpan

22 May2021

Living costs Basic living costs for the poorest 10% of UK households rose by 4.1% in March - eight times faster than average weekly earnings, according to the latest living standards index from the TUC (Trades Union Congress).

The updated index, which comes ahead of new inflation figures, tracks living costs for different households against average weekly wages. It shows that CPI inflation for the worst-off 10% of families was 4.1% in March - compared to 3.3% for the wealthiest households in the country.

With typical weekly earnings increasing by just 0.5% during the same period, wages fell in real terms by 3.6% for the most cash-strapped households. This marks the joint-sharpest pay fall for more than two years.

The poorest spend on average 17% of their earnings on food and non-alcoholic drink, whose prices increased by 4.6% in March, while the richest spend just 10% of their income on these costs.

Furthermore, the index revealed that whilst transport is the largest single expenditure for richest households, utilities - whose prices rose by 6.8% in March - take the biggest bite out of the poorest families' budgets. Indeed, over a quarter of the worst-off households' income is spent on electricity, gas, water and other fuel bills.

A spokesperson for Think Money commented: "Rising living costs exceeding wages can be a real worry for many families - and could increase the risk of debt problems and other financial worries. Anyone having difficulties affording their monthly outgoings should get some professional advice ASAP."

Image iStockPhotos / Don Bayley

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Tags: living costs, household, home, inflation, poverty, utilities, debt

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