A report by the accountants Ernst & Young highlights that household bills, , mortgage payments and taxes are now taking up 78% of household incomes - the highest proportion for four years.
Ernst & Young point the finger of blame at higher interest rates driven by the four interest rate rises since last August (see earlier stories in knowledgebase)
In addition the accountants point to other household costs, such council tax bills, water rates, pension contributions and petrol, which have all been rising faster than general inflation.
The result is that money left over for discretionary spending has dropped from 28% of the average household's gross income in 2003 to just 22% now.
According to Ernst & Young's calculations, this means the average home now has £51 a month less to spend than it did in 2003, after paying these monthly overheads.
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