Better-off families are increasingly strapped for cash as spending on bills and food soars to the highest rate in nearly two years, a report has claimed.
Almost half (45 per cent) of households spend at least three-quarters of their income on essentials, according to the study, while even high-earners have been forced to cut back.
High utility bills drove a 6 per cent, year-on-year rise in February, the biggest growth in almost two years.
Water bills were up 15.9 per cent, gas and electricity rose 10.5 per cent and food and drink had a 6.4 per cent hike, according to Lloyds TSB Spending Power report, which questioned 2,499 consumers.
Inflated prices have forced even the highest-earners to cut spending.
Nearly a quarter (24 per cent) of above-average earners in their 40s and 50s, including some with second homes, have switched to value or own-label products in the past three months, a study by the Axa quarterly Big Money Index found.
Almost one in five (17 per cent) said they had curtailed use of oil, gas and electricity during this period.
A total of 13 per cent of the highest-earners, who are typically in their mid-50s to 60s with no mortgage, a high disposable income and large assets, said they have downgraded to cheaper brands.
A pattern of cutbacks is emerging, according to Nick Turner, Axa UK's director of customer partnerships.
He said: "Tighter purse strings are evident, with many restricting not only the nicer things in life, but also making changes to their food shopping and fuel consumption to a degree that paints a disheartening picture."
Patrick Foley, chief economist at Lloyds TSB said: "Any improvement... will depend on lower inflation on essentials as income growth is likely to remain weak in the short term."Reuse content