Families hit by growing divide over incomes

Families are divided by a growing income gap despite their typical earnings reaching a nearly three-year high.

The latest Aviva Family Finances Report shows that while more families than ever have savings, an increasing number have less than a month’s salary to fall back on, as fears grow over the rising cost of living.

The typical monthly income of UK families reached a high – since January 2011 – of £2,166 in December.

Family incomes have risen consistently during the last 18 months and by 12 per cent since January 2011 when the typical family took home £1,937 a month.

But divorced, separated or widowed parents have seen their monthly incomes fall by 14 per cent over the same period to £1,189.

The cost of living has worn away at family savings over the last year. Families with less than £500 put away jumped from 14 per cent to 30 per cent over 2013. Meanwhile, the percentage with less than £2,000 to fall back on climbed from 28 per cent to 40 per cent.

Louise Colley of Aviva said: “The cost of living is uppermost in many people’s minds this winter. Growing incomes mean some families will be starting the new year in a better financial position than they have become accustomed to in the last three years.

“But sadly the widening gap between the ‘haves’ and ‘have-nots’ means this cheery outlook will not be shared by all.”