Average monthly spare cash has dropped by over £160 since last year, with many households forced to cut back

Most families in the UK have less spare money at the end of each month, new figures show. According to MoneySuperMarket's Household Money Index, the average person's monthly disposable income dropped from £682 to £514. Between April and June.

Why is this happening? The biggest reason is the cost of essential bills. Households are now spending 75% of their income just on basics. Things like water, energy, childcare and broadband.

Water bills are up by 11%, childcare costs by 10%, broadband by 8%, groceries by 4% and health insurance by 22% compared to last year. Contributions to private pensions also dropped by 11%, which could lead to problems in the future.

Lis Barton from MoneySuperMarket's parent company, MONY Group. said "Energy bills eased off... offering a bit of breathing space in a still-volatile market. However, there are some bills that are more difficult to cut, like water and childcare costs."

Even though some costs, such as energy and mortgages, have decreased slightly, those savings haven't been enough to offset price rises elsewhere.

The average UK household now spends about £50 a day, or £1,564 a month, on regular outgoings.

Despite all this, some people continue to treat themselves. More households are paying for streaming services, games, and gym memberships, perhaps to enjoy little comforts even when money is tight.

But there are signs of worry. Research from Deloitte found that people are saving less, and their confidence about the future has dropped. Céline Fenech at Deloitte said:

"Concerns of a slowing labour market have left consumers worried about job security and income growth prospects, while persistent inflation... negatively impacted sentiment towards personal debt."

With rising bills and less money left over each month, many UK families are having to watch their spending more closely than ever.