Disposable income down nearly 30%

As many as one in 10 of us are spending 90 per cent of our salary on "essentials" such as rent and bills according to research by Abbey Credit Cards, leaving on average just £382.21 per month of disposable income.

This represents a decrease of 29 per cent in average disposable income levels compared with two years ago, when Britons had on average £541.44 left over each month after spending on essentials such as mortgages, bills and food.

The Abbey study found that the average Brit now spends around 75 per cent of their income on essentials. Unsurprisingly, the main cost of living for most of us is our monthly mortgage or rent - almost a quarter (23.7 per cent) of our income is spent meeting this cost. Following this closely were household bills and food costs (both 16 per cent).

Callum Gibson, Head of Abbey Credit Cards, comments: "With the cost of living increasing so drastically in the past two years, in particular the cost of essentials such as food and bills, it's important to make sure that you budget effectively and economise wherever you can. With the new Abbey Credit Card you get 3 per cent cashback on supermarket purchases and petrol for the first 6 months, which could save you up to £75 in total."

Abbey's new credit card:

- 3 per cent cashback on the 'essentials' - petrol and groceries - for the first six months
- Zero per cent on balance transfers for 9 months and purchases for 3 months
- 18.9 per cent APR on all balance transfers and purchases (after the respective introductory offer periods)