Quarter of household income goes on paying bills

Brits spend almost a quarter (23 per cent) of their disposable income on essential household outgoings such as utilities, council tax, food and fuel, a figure that increases to 56 per cent for the nation's poorest households with an income of less than £14,000 per year, according to new research from the Santander 123 Current Account.

Food is the biggest element of essential household expenditure, accounting for 9.7 per cent of disposable income, bills account for 6.9%, while council tax accounts for 3.6 per cent and petrol or diesel for 3.2 per cent.

The research for Santander's 123 Current Account also found that nearly half of British people surveyed said the rising cost of household bills over the past 12 months has made them more financially aware than they were.

Further, British households are reducing energy use in an attempt to reduce household bills, particularly turning lights off when not in use, using heating less or turning it down, turning off electrical devices and using less hot water.

Consumers could benefit from Santander's 123 Current Account, which pays up to 3% cashback on household bills paid by Direct Debit. In short, households can save money on bills they already pay. Santander urges customers to use its 123 calculator to find out how much they could save. This can be done online at santander.co.uk or by speaking with an advisor in their local branch.

Hetal Parmar, Head of Banking at Santander, said: "Rising energy price rises and the cost of living generally are putting extra strain on household finances, causing people to tighten their belts but also to become more aware of their finances.

"There are ways to save money, for example, by finding the best deals through comparison sites or making use of discounts offered by companies for paying bills by Direct Debit. Santander's 123 Current Account also offers up to 3 per cent cashback on household bills, which could make a big difference. People can find out how much they could save by using the 123 calculator on the Santander website or in branch."

The research reveals that one in four single parents (25 per cent) say they would struggle to cope with future household bill price rises. One in five (20 per cent) households with an income of less than £14,000 said their finances would not be manageable in the event of price rises, as did 12 per cent of households with an annual income of between £14,001 and £21,000.

Households in Wales use the highest percentage of their income on essential household spending, using 26.2 per cent of their disposable income on it. They are followed by the East Midlands (25.8 per cent) and the North West (24.5 per cent). London households spend the lowest proportion of their earnings on essential outgoings (20.4 per cent).

For more information, visit santander.co.uk.