In May, customers withdrew a record amount of capital.

Billpayers used their bank and savings accounts at a record level last month, leading charities to issue cautions about the continuing high cost of living.

The growing cost of living, including grocery costs, mortgage payments, and rent, is placing pressure on household budgets.

The Bank of England reported that £4.6 billion more was taken than was paid into the bank and building society accounts.

That was the biggest level witnessed since similar records began 26 years ago.

Banks under pressure

The latest data represents a significant increase from April when net deposits totalled £3.7 billion in the bank and building society accounts.

When money in National Savings and Investment accounts is taken into consideration, there was a net withdrawal of £3.8 billion from accounts in May, compared to a £5.3 billion rise in April.

Banks are being criticised of providing "poor" interest rates to depositors and failing to appropriately reflect the higher Bank of England base rate in their returns.

Chancellor Jeremy Hunt stated that it was "taking too long" to pass on interest rate hikes to savers. People with quick access accounts were particularly hard struck by the "issue that needs to be resolved," he added.

According to UK Finance, the banking industry's trade association, "savings rates are driven by a number of factors, not just the Bank of England's bank rate - one key factor is whether someone wants instant access or can deposit money for a longer period of time."

However, MPs on the Treasury Committee have often addressed the problem of savings rates not rising in accordance with mortgage rates in recent months.

Some families are also paying additional taxes. According to new HM Revenue and Customs estimates, there will be an additional 1.3 million income taxpayers this fiscal year in comparison to the prior one, with the bulk of them being women.

The chancellor has set the personal allowance for income tax at £12,570 until April 2028. Income below this threshold is exempt from taxation for basic-rate taxpayers. Anyone obtaining an increase that raises their salary over this threshold must begin paying taxes.

Jeremy Hunt has also fixed the point (threshold) at which taxpayers begin paying higher tax rates, and it was cut for the highest rate in April.

This has resulted in an increase in the number of top "additional" rate taxpayers from 555,000 last year to 862,000 this year. During the same amount of time, the number of people paying the 40% income tax rate increased from 5.28 million to 5.59 million.

The number of mortgage approvals for house purchasers jumped from 49,000 in April to 50,500 in May, according to Bank of England data. During the same time period, remortgage approvals increased from 32,500 to 33,600.

Lenders, on the other hand, are continuing to hike the rates they charge for new fixed-rate loans.

(Sources: bbc.co.uk)