Joe Garner, head of HSBC’s personal finance services, attributed the drop in disposable income in the bank’s 8.2 million consumers’ current accounts to increasing food, gas and electricity bills: “People are really feeling the squeeze. There is definitely some strain here.”

On a positive note he said some of the decline might be due to an increasing number of Britons being more proactive and putting money into high-rate savings accounts: HSBC recorded a 19 per cent increase in deposits held in their savings accounts range.

Contrary to its competitors, HSBC also reported a six per cent fall in charges for failed repayments on loans on time, which the bank put down to their cautious lending policy.

According to a new survey from Abbey Savings, more consumers are forced to fall back on their savings to pay their bills. The findings show that savers have withdrawn an average £579 – or £6billion in total – from their ISAs, which is a quarter of the average ISA subscription for the tax year 2007/2008.

A third (31 per cent) of the respondents said they had withdrawn money to pay their day-to-day bills, and a further 15 per cent said they had used the money to cover their mortgage repayments or utility bills. Another quarter said the money paid for an unforeseen cost such as an emergency repair.

However, not only those feeling the squeeze emptied their ISAs: a significant 26 per cent used the money to indulge themselves, booking a holiday or buying a new car, while another eight per cent went on a spending spree.

“You never know when you’re going to need to fall back on your savings and in this respect dipping into them to meet bills such as gas bills is no bad thing,” Reza Attar-Zadeh, Director of Savings and Investments at Abbey, commented.

“On the other hand dipping in to your ISA savings could prove costly in the long term. With a Cash ISA allowance of £3,600 per tax year any withdrawals made can not be replaced, so that part of your allowance would be lost forever.”

Mr Attar-Zadeh recommended: “If you’re saving towards a goal such as home deposit or looking to maximise the amount of cash you have put away for retirement then the advice must be to try and reduce your outgoings rather than dip into your ISA pot.”

© Fair Investment Company Ltd