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Millions of families are running out of cash for bills

Posted by hannah on 10/05/2012

Overdue bill

Millions of households risk sinking in to debt as double dip recession leaves them a gap of an average £74 a month between what they need to pay the bills and their income.

More than 3.3 million homes do not have enough cash to meet living expenses, according to a survey by financial firm Legal & General that shows household finances are worsening.

The number has risen by nearly 50% from 2.1 million between September 2011 and April

Worst hit are families in the West Midlands, who are finding their finances under pressure from an average £108 a month shortfall.

Overall, 60% of households have money problems, says the research.

Legal & General’s Mark Gregory said; “The latest figures show that around 3.3 million households say they are spending more than their income on paying bills and debts. That’s more than a million higher than back in September last year, just as the first quarter of the double dip recession was about to kick in, when that figure was 2.1 million.”

Although more families face a monthly financial shortfall, the gap between income and spending has shrunk in the last three months, down from £96 in January.

“However, the overall monthly shortfall has increased by more than £30 million driven up by this higher number of households unable to make ends meet. We estimate the nation’s monthly shortfall now stands at £244 million each month,”  said Gregory.

London and the South East has the largest increase in households facing financial stress - up 613,000 since January. London families have a £100 spending shortfall, while those in the South East have an £86 gap.

The region accounts for just over a million, or one in three of all households struggling with money.

The North East was the only region to return a decrease - 48,000 fewer families reported money problems taking the total down to 120,000.

The smallest gap between income and spending is in the East Midlands, where the gap is just over £21.

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