A new report has revealed that nearly one in five individuals had no money left after they had shelled out for all their essential expenses during January.

The results released by Lloyds TSB, revealed that the number of people only just managing to scrape by rose by 4% in the first month of the new year, compared to December 2011.<br>

The study is conducted monthly and looks at the finances of 2,553 consumers across the country and has shown that, overall, people are £10 worse off now than they were 12 months ago due to the impact of rising costs hitting frozen income. In real term, incomes in January tumbled by 1.5% despite a recent drop in inflation.

Those living in the north as well as the Midlands were hit the hardest, with individuals between the ages of 35 and 64 the worst off.

 The spending power report from Lloyds TSB found that the number of Brits who had no money left after they paid out on essentials jumped from 15% in December to 19% in January 2012. And there was also an increase in people's perception of worsening finances too - the percentage that felt their money was overstretched climbed from 40 to 43%.

However, the research also showed that it is not just the impact of inflation which is putting pressure on household budgets. The amount of debt being repaid also grew. In January 2012, debt repayments due every month increased by 1.1% compared to January 2011, a fact which analysts have attributed partially to more consumers refinancing their loans.

The chief economist from Lloyds TSB, Patrick Foley, said the study demonstrated that households are 'still being squeezed' with many 'yet to feel any benefit' from the drop in inflation. But Mr Foley predicted that over the next few months finances should start to feel less pressured, with price cuts and other measures starting to filter down.