LONDON, Jan. 1 (UPI) -- The average family of four will be worse off by nearly $6,000 in 2011 than in 2010, research by a British newspaper said.
The Guardian said a combination of higher prices, lower benefits and pay freezes will make it difficult for many people to cope during the global recession.
The newspaper said a family of four will pay more than $450 more for food in 2011 and that the rising cost of living will push many people to the brink of bankruptcy.
"The worst is yet to come," said economist Keith Stevens. "We are still approaching the peak in personal insolvencies. People have been putting off reducing their debts just to get through the last year. As soon as interest rates go up, more people will struggle and personal insolvencies will rise."
The newspaper said it based its forecast on predictions from leading economists and industry leaders. Britain's value-added tax jumps to 20 percent on Jan. 4 and poor harvests worldwide are increasing the cost of clothing and food.
The newspaper said its mythical family would pay nearly $1,000 more in rail fees and that energy bills will climb by more than $300. Additionally, it said predicted rises in interest rates could add as much as $1,100 annually on a $300,000 mortgage.
"There is no doubt that the start of 2011 will see a real impact on everyone's finances, especially the price of petrol due to rise and VAT (value-added tax) increasing," said Kevin Mountford, from Moneysupermarket, a price comparison Web site.
"These increases are on top of soaring energy bills, car insurance prices and potential interest rate rises, so the next 12 months could see the nation's wallets getting squeezed further," Mountford said.
