Millions of families are waging a daily battle to stay afloat financially, reports the Bank of England. In a newly-published report, the Bank has found growing evidence that people are spending money only around paydays because they are broke for the rest of the month, and that shoppers are becoming more and more focused on obtaining value for money.

Many consumers, desperate to keep within a budget, are spending only cash, rather than use a credit card. The Bank also found evidence of a squeeze on discretionary spending, such as recreational activities like trips to the cinema or tickets to sports events. Many families are booking holidays, but they are opting for all-inclusive packages to keep better control of costs.

The report comes as the impact of the Government's austerity measures starts to be felt, with tax rises and benefit changes. For example, VAT was increased from 17.5% to 20% in January, and National Insurance was increased in April.

To make matters worse inflation, currently 4.5%, is rising but the average private sector worker is getting a pay rise of just 1.9%.

It seems clear that millions of Britons who are barely making ends meet today are going to need help with debt in the near future. In particular, thousands are going to need help with debt management plans, with individual voluntary arrangements (IVAs) or debt assistance of some other sort. If you are one of these, please consider giving us a call just as soon as you can. We can help.

By James Murray