LONDON (REUTERS) - British households are less worried about the outlook for their finances next year as a recovering economy raises the prospect of more pay, a survey showed on Monday, Dec 16, 2013.

Expectations for household finances over the year ahead remained gloomy, but the degree of negative sentiment was its lowest in nearly four years, according to the survey by financial information firm Markit.

Living standards have turned into a major political issue in Britain where consumer price inflation has outpaced wage growth.

The overall Markit Household Finance Index, which measures households' overall perceptions of financial well-being, rose slightly to 39.7 in December after a plunge in November to its lowest level in seven months.

"December's survey suggests that a rising proportion of British households are hopeful that the squeeze on their finances will begin to subside during 2014," said Markit senior economist Tim Moore.

"However, while job insecurities have receded this year, the latest survey highlights that income and saving trends remain very subdued, especially at the lower end of the pay spectrum." Markit's measure of workplace activity in December hit its highest level since the series began nearly five years ago. But income from employment rose only moderately.