Families' income set to fall

HOUSEHOLD disposable income is set to fall for the first time in seven years on the back of increasing utility bills.

The share of total income available to spend on items of choice will fall to just 37.3% in 2005, down from 37.5% this year. The fall is the first since 1998 when the figure stood at 28.6%.

The Spendable Income Index, produced by uswitch.com, found the average UK household will spend an extra £421 servicing their property next year.

The Index forecasts gas prices will rise by 12%, with electricity prices increasing by 6.10%.

Gas and electricity prices have already started to escalate. Powergen announced its third price rise of the year last week and Scottish Power and British Gas have also increased bills due to the high cost of oil.

Only vehicle insurance and clothing and footwear tax looks likely to decline in 2005, falling by 0.8% and 1% respectively.

Andrew Salmon, uswitch.com managing director, said: 'The rise in domestic energy prices has taken up many column inches over the past quarter. However this is just one area of the household that‘s experiencing price increases.'

He said households can expect water bills to continue to rise in 2005, while the prospect of increased taxes will also squeeze costs.

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