One in five 'has no spare income'

Once you've paid for all your essential bills, your mortgage/rent and your groceries, perhaps you have money left over for savings, a meal at a restaurant, or taking the kids out for the day. But according to a Lloyds TSB report, as many as one in five of us have no spare cash after paying for the essentials.

Between December and January this year, the number of people struggling increased slightly, as people struggled with Christmas debts or the after-effects of overspending. The number of people without spare cash rose from 15% in December to 19% in January. 3% more people in January felt that 'money is tight' compared with December.

People aged between 35 and 64, as well as those living in the Midlands and the North, found their spending power the most restricted.

Incomes are still not rising as quickly as inflation, and incomes actually fell by 1.5% in January in real terms. Gas and electricity bills are 9.3% higher than this time last year and water bills are also up by 13.6% on a year ago, although recent cuts in gas and electricity bills were yet to impact on billpayers' outgoings.

It seems that debt is growing again too after a bit of a decline. Regular debt repayments, including secured debts like mortgages and unsecured debts like loans and credit cards, rose by 1.1% in January compared with the same time last year.

A spokesperson for debt management company Gregory Pennington commented: "We advise people struggling with debt to speak to a debt adviser instead of borrowing any more money, because it could be possible to lower your monthly repayments."

Lucy Bower