Mums forced to cut savings by £400 a year to pay bills

Balancing the household budget without slipping into the red is getting tougher for cash strapped parents.

Rising prices and Government cut backs mean nearly 50% of mums say they'll be forced to use savings, earmarked for their family's financial future, to cover household bills over the coming year according to research from Family Investments.


It reveals a staggering 47% of mums will be cutting their family savings by nearly £400 and channelling the cash into covering their day to day living expenses. And in order to 'balance the books' mums will be slashing savings in three ways.

Firstly short term savings, typically the money we save in instant access accounts, (for this summer's holiday or emergency car repairs); this will be cut by £240 a year. Then there are cuts to the kids' savings by £60 a year; and mums will also be sacrificing their pension savings, which for nearly 20% of us average around £160 a month, in order to boost the household piggy bank.

This means a combined total of over £1 billion will be cut from family savings across the country as households struggle to meet spiraling costs on everything from food and petrol to energy bills.

And it's those energy bills that are creating the biggest headache; up around £37 a month, with over three quarters of mums worried about how they'll pay them.

Over one third of us worry about covering the cost of that weekly supermarket bill which has gone up faster than the rate of inflation, according to research from investment bank UBS, adding another £35 a month to our household spending.

'Mums across the UK are being resourceful with over 60% admitting to eating out less and buying supermarket own brands', says Katie Moore of Family Investments. 'But they're still being forced to cut back on savings; even though they're concerned about the consequences of this'.

And filling the car for the daily school run costs more too; with petrol prices hitting a new record high now topping £6 a gallon, and with the current situation in Libya and the Middle East worsening it means we're unlikely to see pump prices slashed in the near future.

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