The UK's poor will see the amount of spare cash at their disposal drop by a fifth this year, stated a recent report.
According to data from Retail Economics and HyperJar, the least affluent households will see their discretionary income fall by 19.5 percent per household, or almost £850 as food, clothing, fuel and energy prices continue to soar, and wages lag behind inflation.
For the average family, the cash left after paying for essential goods will tumble by almost 6.5 percent or £430.
More than £12 billion worth of spending on non-essentials across the whole economy is set to be wiped out in total, Retail Economics found.
"With many households already living beyond their means, the inflationary shock will push them into the red making it increasingly difficult to cover essentials and repay debt," the report said.
While 13 percent of households claim they are only just about managing to cover minimum payments on credit card bills, a further 6 percent are already unable to, analysts said.
The report comes after it emerged that UK inflation has hit a fresh 30-year high of 6.2 percent in February, while grocery price inflation reached 5.2 percent in March, the highest level since April 2012, according to Kantar.
British Retail Consortium (BRC) also revealed today (30) that prices had risen for five straight months, exacerbated by the geopolitical conflict between Russia and Ukraine.
Food inflation jumped to 3.3 percent – its highest rate since March 2013 – while non-food inflation reached 1.5 percent in March, up from 1.3 percent in February and its top rate since February 2011.
Prices are rising fastest for pet food and savoury snacks, such as crisps, but are still falling for some products such as fresh bacon.
Price rises are being fuelled by the rising cost of labour and basic commodities such as wheat and cooking oil – as well as energy and packaging driven by a combination of Brexit, resurgence in demand as economies reopen after pandemic lockdowns and the war in Ukraine.
