How ten years of tax hikes have hit families

Research suggests the Government's take from taxes has leapt 85 per cent in a decade.

The result, it reveals, is that the 54.7 per cent growth in gross pay since 1997 has translated to a much lower rise of 44 per cent in household income, putting it at an average £33,941.

At the same time, the average annual cost of 'must-pay' bills has risen from £11,565 to £16,411.

The effect is that the proportion of earnings left after taxes and bills are taken out - the bit for frills and spills - has fallen from 34.5 per cent to 32.5 per cent.

The priority for any family is keeping a roof over its head, together with heat, light and transport.

The report by the price comparison website Uswitch said spending on housing has gone up because the cost of an average property has climbed 231 per cent to £252,056.

That means Britons are taking on bigger loans which require larger monthly repayments.

The study also shows council tax is up 92 per cent, with the figure due on a Band D property now an average £1,321 a year.

Other rises since 1997 include:

The cost of communication - up 76.9 per cent to a £743 a year.

Spending on health, up 59.2 per cent to an average of £519.

The price of petrol, up 54.6 per cent to an average of £1,106.

The cost of insurance, up 51.7 per cent to an average of £1,047.

The price of the BBC licence fee, up by 49.6 per cent to £138.

Annual spending on transport per household, up 48.5 per cent to £4,824.

On a positive note food is up by only 22.4 per cent, with average annual spending at £2,771.

Uswitch's personal finance expert, Mike Naylor, said: "Cool Britannia is now Cost-a-lot Britannia.

"Our pay cheques may be getting fatter but the chunk that we have to hand over to pay taxes, bills and other living costs is growing even faster.

"We are working harder but we're not getting any wealthier."

Among the worst hit are nurses and those in the armed services.

The average pay of nurses and midwives is up by 39 per cent, which is 7 per cent less than average.

Between 2001 and 2005, the average forces household's income rose 15 per cent to £25,631. In other households it was 17 per cent to £49,335.

The study reveales regional differences. Families in Nottingham appear hardest hit. Some 64.2 per cent of their net income goes on the essentials, while the average is 51.6 per cent.

By contrast, the essentials equate to 32.7 per cent of net income in West London.