One in ten adults struggling with money expect to have to borrow money to cover the cost of essential bills over the next year.
Image source: Towfiqu Barbhuiya / Unsplash
Despite today being the long-awaited ‘freedom day’, many UK adults still feel a pandemic-related tug on the purse strings.
New research from Yolt has found that 17% of adults (8.7m) are ‘funded’ and an additional 10% expect to still struggle to make ends meet over the next 12 months.
Just over a fifth (21 percent) say their money problems stem from a drop in income, with 15 percent saying they have had long periods without access to disposable income for non-essential expenses, with 28 percent of those without access to disposable income attributing it to shift work and zero hour contracts.
Those who still find themselves “financially exhausted” plan to have to borrow money to cover essential bills (10%) or simply be unable to pay them (seven percent).
“Our research shows that despite the easing of restrictions and signs of economic recovery, the pandemic continues to have a very real impact on the finances of many UK households. This stretched group, despite good financial behaviors such as budgeting, is still struggling, ”said Pauline van Brakel, product manager at Yolt.
“It is essential that people who see themselves in this situation, and those at risk of being at their wit’s end, continue to take care of their finances, in order to avoid a situation where they lose track of essential bills or see their monthly commitments get out of hand. . “
More than one in ten adults (12%) saw their monthly spending exceed their income in the last year, resulting in an average overrun of £ 277 per month, indicating that we could see an increase in household debt here in the UK.
“It may be easier said than done, but beyond spending review and budgeting, consumers should, wherever possible, seek to reduce their debt, because it not only means reducing debt. financial pressure, but can mean more money in your pocket in the long run, ”van Brakel added. .
Yolt also found that those who experience a pinch on the purse strings were 20% more likely to review their budget and spending than those who are deemed “comfortable” (89% vs. 69%).