Families 'Worse Off Than During Recession'

British families have less money to spend now than they did at the height of the recession, according to new figures.

The study shows the average family has less cash to spend on everyday items, are earning lower salaries and are more in debt.

Markit's Household Finance Index, which measures consumer spending in Britain, showed that more families were using their savings to supplement rising living costs.

The survey, which asked 2,000 families about their spending habits, revealed that debt was at its highest level for nine months.

Teacher and mother-of-one Rorie Tomlinson, 33, said she and her husband were already cutting back.

''We are already making plans and making savings," she said.

"We are looking at our pension payments for the future and cutting down on everyday spending such as food and going out.''

Pensioner Sally McCall, 67, a retired teacher, told Sky News: ''I have cut down on my fuel bills and look for savings where I can.

"I have had to go back to doing some part time work to make some extra money.''

Economists have warned that tighter household budgets and a reluctance to spend money could hamper the UK's economic recovery.

Tim Moore, senior economist at Markit, said: "Recent events have made a week seem a long time in economics and August's survey is the first sign that the slew of downbeat headlines has knocked consumer sentiment."

He said: "With consumer spending accounting for around two-thirds of UK gross domestic product, this does not bode well for the economy in the second half of this year."