Rising prices means families £7,000 a year poorer than they were five years ago.
Hard-working families are £7,000 a year worse off than five years ago because of a lethal combination of rocketing household bills, rising food prices and pay freezes.
Research by The Telegraph has found that a family of four with a single earner on £50,000 are £6,902 worse off this year than they were in 2007.
The latest blow came last week with news that water bills would reach record levels in April. Consumer groups say this will cause a financial nightmare for households already suffering from high energy prices as well as rising fuel, food and insurance costs.
For example, childcare costs have increased by 30pc over the past five years. Figures from the Daycare Trust show that the average cost of 50 hours’ nursery care per week for a child under two is now £10,056, compared with £7,904 in 2007.
Drivers have been hit with a double whammy of increasing fuel costs and record insurance premiums, leaving households facing an annual motoring bill of as much as £5,300.
With petrol costing around 134p a litre, an annual fuel bill for a two-car family now exceeds £3,400 – a rise of £1,170 compared with five years ago.
Drivers are also struggling with the cost of insurance. Figures from the AA show that premiums have doubled since 2007, leaving motorists more than £520 worse off.
Figures from the Office for National Statistics show that the cost of food has increased by more than a quarter since 2007 – adding £1,100 to the average family’s annual shopping bill.
Over the past 12 months alone, the cost of many household staples has risen dramatically, with the price of lamb, for example, rising by 17.5pc and fresh fish 9.3pc more expensive.
The increase in VAT has also hit families hard, with the average household spending around 55pc of their disposable income on the tax. With VAT now standing at 20pc, accountancy firm Grant Thornton estimates that it costs families nearly £4,070 a year – up by more than £530 since 2007.