Britons `15% worse off` than five years ago

Britain`s economic downturn in the past year has meant a jump in household outgoings, according to a report from Ernst & Young.

The accountancy firm has estimated British consumers are 15 per cent worse off than five years ago.

After tax and household bills, less than a fifth of the average family`s gross income is left over, compared with 28 per cent in 2003-2004, the figures show.

This equates to an average of under £773 spare cash each month. Five years ago the figure was over £900.

Ernst & Young said the increase of household bills by almost 45 per cent in the past five years has contributed to the situation.

Jason Gordon, Ernst & Young`s director of retail, said: "Many UK consumer segments are clearly feeling the pinch as big rises in household costs are far outstripping relatively modest wage inflation."

Also this week, the Post Office has warned older people not to under or overpay on their life insurance payments in the midst of the credit crunch.