Proportion of disposable income spent on energy bills rocketing

February 7, 2013 at 10:05 am

With the average household’s energy bills having doubled since 2005, it is little wonder that more and more of our disposable income (i.e. income after paying tax) is going on paying our gas and electricity bills.

Recent research carried out by Saga, the over 50s group, showed that the proportion of disposable income spent on energy has increased since 2005 by 55% for the under 50s, 63% for the 50 to 64-year-old age group and 57.5% for the 65s and over.

Many of us are doing our best to save energy by switching off lights when we leave a room, turning the thermostat down, reducing our hot water consumption and using fewer electrical devices, but still we are having to tighten our belts.

If you feel that little is left after bills for a night out, a new outfit or a holiday you will not be surprised to learn that almost a quarter of our disposable income goes on all the boring stuff: utility bills, council tax, fuel and food. On top of this, of course, comes the cost of our mortgage or rent, estimated at around 25 to 30% of disposable income.

With wages failing to keep pace with inflation, many households are having to do without the luxuries and are also trying to cut back on items such as broadband and mobile phone costs.

The bad news is that, according to a report by the consumer group [ Which?] published last year, the proportion of disposable income spent on bills will continue to increase for at least another 18 years.

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