By Marcus Leach
A survey by Markit released on Monday shows that close to 40% of UK households witnessed a deterioration in their finances between July and August.
The research came from a study, of 1,500 adults, and revealed that the decrease in finances was at its worst since February 2009.
Almost 34% of households reported a drop in their savings in August, compared to just 9% that saw an increase. As a result, the survey signalled the steepest reduction in savings for almost two and a half years.
Those in the lowest income group saw the steepest decline, with around 44% of households with an income below £15,000 per year saw a fall in savings, while only 2% reported an increase.
Reduced savings in part reflected a further drop in income from employment.
Debt levels meanwhile increased for the fifth month running and at the fastest pace since November 2010. Around 22% of households saw a rise in debt, compared to 17% that noted a fall.
Strains on household finances from higher debt and lower income levels contributed to a deterioration in respondents' willingness to make major purchases.
Around 50% of households noted a fall in their desire to buy big-ticket items, while only 6% suggested an improvement. As a result, the index was the lowest since January 2011 (when the standard VAT rate rose to 20%).
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