Bills - Work 'til June to pay your bills

The average household has to work until June each year before they have earned enough money to pay their basic essential household bills. That's according to new research by online bank Egg. Indeed, all of this is before they even think about their lifestyle costs, saving for the future or leftover spending money.

With the Chancellor delivering his pre-budget statement, Egg has taken the opportunity to publish "The Real Budget Report", which looks at the budget of the typical UK household and assesses where its £1,953 net salary goes each month and, importantly, what is left over for spending.

The report highlights the fact that many consumers are unaware of the cost of running their home and as a result often spend money which is already committed to bills. The result is a potential overspend of about £300 per month - a staggering £8.1 billion per year.

The research found that in total the average household spends approximately £888 per month on household bills. Or £285 billion every year. Biggest cost not surprisingly is the mortgage or rent (£611). Meanwhile, Council tax comes in second at £109 per household.

Regular lifestyle expenditure - such as running a car or subscriptions and memberships - constitute 6% of net salary and collectively cost the nation £36 billion each year (or £126 per month). The research also found that Direct Debit for lifestyle bills have increased by 50% in just 5 years.

As a nation we collectively spend £74 billion on short term debt, savings and pensions. Interestingly as the pension debate heats up Egg's research found that households spend over three times more each month servicing short term debt (£113) as they do saving into their pensions.

What is left over after all of the above expenses have been met? The research found that the typical UK household has, on average, £714 per month to spend. This discretionary spend costs UK households £19 billion each month, equating to a total spending fund of £228 billion each year.