The tough economic conditions in the UK are currently being realised in the budgets of many households and in no place is this more obvious than the issues surrounding energy bills.

According to a new report from uSwitch.com, almost four million families are now in debt to their gas and electricity supplier – a figure which equates to 14 per cent of the British population.

The average amount British consumers now owe their energy company is £131, which is four per cent higher than at this time last year, but 15 per cent more than in 2008 before price rises were implemented.

This means that collectively, the UK public owes £478 billion on their gas and electricity and this figure could rise as the average utility bill is now £1,252, with many families struggling to find the money to pay the next bill.

Ann Robinson, director of consumer policy at the group, said the severe price hikes issued by all utility suppliers last year have left many billpayers reeling and now these pressures are really being felt.

"Although suppliers have cut their prices this year, the average reduction of £41 or 3.2 per cent doesn't come near the average increase of £224 or 21 per cent seen since the end of 2010 – as a result consumers will continue to struggle to pay their bills and debt will continue to grow," she stated.

Ms Robinson added that people should ensure that they are making savings where they can. Switching energy supplier, paying with direct debit and regularly checking meter readings can all help to keep costs down.

Consumers could also look to make further savings by initiating a debt management plan which could reduce outgoings in other areas, making more money available to deal with large unexpected bills when they drop through the letterbox.

By Amy White

People who are struggling with debt will find they do better by looking for help than they will if they bury their heads in the sand and ignore the problem.

Annie Shaw, director of CashQuestions.com, said people who have money problems should not see this as "shameful" or "embarrassing" and shy away from admitting there is a problem.

She added: "You're not alone and the sensible thing is to get some help, rather than getting yourself more and more into debt by borrowing more and really having no hope of paying it back."

Ms Shaw advised those who might pile up credit card debt that although current trends suggest people are spending less on large purchases with plastic, all the smaller items they pay for using credit will still add up and ultimately leave a large bill.

Getting control of debts is increasingly a priority for consumers, according to a poll published by GfK NOP on behalf of the Financial Services Compensation Scheme last month.

It found 30 per cent of consumers have high-interest debts, but 81 per cent are trying to pay these down.

By Joe White

Debt many be among the main reason why millions of British adults are left with no money spare at the end of each month.

A study by Scottish Widows has found 8.2 million people (16 per cent of the adult population) are left with nothing at the end of the month, while a further 9.8 million have less than £50 left and 4.4 million feel uncertain about their financial futures.

The figure applies to the situation once people have paid all their essential bills, which can include debts like mortgages and credit cards.

And the survey revealed a lack of financial security is often due to debt, with 21 per cent blaming this factor for their situation.

Moreover, the situation is worse than a year ago, with 21 per cent saying they have "a lot less money spare at the end of the month than a year ago and 26 per cent saying they have "a little less", while 15 per cent say their finances have been hit hard by the economic climate.

Describing the difficulty facing many people, savings expert at Scottish Widows Catherine Stewart said: "Families are feeling the pinch as tough economic conditions continue; outgoings are increasing while income largely remains the same, as a result of pay freezes."

She identified "neglect" of future finances as a consequence of this, with many doing little to save for the future.

At the same time, the survey showed many people are making adjustments by spending less cash, with 47 per cent reducing luxury spending and 32 per cent putting holidays on hold, while 29 per cent are not saving because they cannot afford to.

The situation may continue to be difficult as Britain has been tipped to stutter along with low economic growth over the next few months.

Earlier this week, the British Chambers of Commerce unveiled its Quarterly Economic Survey for the first three months of 2012, which said the UK will not have slipped back into recession but will only see gross domestic product rise by 0.6 per cent this year.

By Joe White

Cash-strapped consumers are increasingly turning to low-cost stores such as pound shops while mainstream retailers suffer, a new survey has indicated.

Cashback site Quidco revealed its average member spends 35 minutes a week checking out as many as six retailers per day to get the best price, something head of PR Jo Roberts said was a consequence of the recession.

She said: "No longer settling for the first price presented to them, shoppers are spending more time searching outlets that offer what they want and for the right price."

This situation may reflect not just tighter budgets due to inflation and wage freezes, but also debt and the need to reduce it.

Debt consolidation measures may help with this process.

The extent to which consumers start to feel better – or otherwise – about their finances after the Budget will depend on the extent to which inflation falls, chief economist at Lloyds TSB Patrick Foley recently commented.

Chancellor George Osborne said in his speech that the typical consumer will be £170 better off after inflation when the £1,100 rise in tax allowance comes into effect in April 2013.

Posted by Paul Thacker