Food costs are key problem for struggling families

By April 2, 2014Finance, News

Rising food costs are the main reason why workers in the North West struggle to make it from one payday to the next, according to a new report by R3, the insolvency trade body.

R3’s latest Personal Debt Snapshot found that 43% of adults in the region say they often or sometimes struggle to make it to payday. Of those in this position, 56% cite the rising cost of food as a problem, 54% blame rising household energy bills and 29% blame the rising cost of transport.

The report follows official figures released last week which show inflation in February fell to 1.7%, its lowest for four years.

Richard Wolff, North West regional chair of R3 and Head of Corporate Recovery and Insolvency at JMW Solicitors, said the number of North West workers struggling to payday had fallen from 51% last September. However he added: “Inflation may be falling, but the cost of living is still too high for people on low incomes. Prices have been rising almost continually since the start of the financial crisis and although the gap is narrowing, wages still haven’t caught up.

“The latest fall in inflation is largely due to a drop in transport prices, which is welcome, but the price of food and household gas and electricity bills remains a bigger problem for many people.”

The R3 report also found that 28% of adults in the North West expected their personal finances to worsen in the next six months, while 21% expected them to improve.

Richard Wolff continued: “An analysis of the figures show that the most optimistic people in the North West are the younger age groups and professionals, perhaps encouraged by the improving economy. Older age groups and unskilled workers are more gloomy – the cost of living is still too high and while low interest rates may be helping young borrowers, they aren’t helping retired people who rely on their savings to get by.”

 

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