A “Moneymood” survey conducted by financial services company Legal & General, found that 2.6 million people are unable to cover the cost of their bills with their salaries.
The gap between their bills and their pay is £85 on average, up by more than 50% in the last 12 months.
The overall number of people who do not have the resources to cover their bills is up by 36% compared to last year, with figures rising from 1.9 million to 2.6 million.
News follows gas and electricity price rises
The study was conducted following a winter of energy price rises. During the past few months, each of the UK’s big six energy suppliers, and a number of small suppliers, increased their rates leaving many consumers to face higher bills.
Subsequent government led cuts to green levies helped mitigate the impact of price rises for consumers, however, the average consumer will pay roughly £53 more for energy in 2014.
‘Gas and electricity costs are not yet showing signs of coming down’
John Pollock, chief executive officer for Legal & General Assurance Society commented: “Despite January inflation falling below 2% for the first time in 10 years, our survey shows we are not yet seeing any strong signs of recovery in household finances.
“Gas and electricity costs are not yet showing signs of coming down and this may be a key factor in holding back improvement of household finances.”
Shortfall varies greatly across regions
The gap between income and bills is largest in London where respondents found themselves £128 short on average every month. This represents an increase of £95 compared to last year.
In Yorkshire and Humberside, the survey found an average gap of £60 per month and in the West Midlands the gap was found to be £86.
A few areas saw the gap between their salary and bill expenses fall, including the South West (gap of £73, down by £15 from last year) and the North East (down to £13 from £41).