This in-depth research which is designed to understand the financial needs of customers who live as part of a family - 84% of the UK population - also shows families have major financial concerns over the next six months.
The typical family now has £1,163 in savings and investments (excluding pensions and property) compared to £849 in January 2011. In terms of how much they are saving, the amount has increased from £22 to £32 per month. The report also shows the number of families with no savings put aside has fallen from 33% (Jan 2011) to 28% (May 2011) and those families saving nothing on a monthly basis has dropped from 40% (Jan 2011) to 37% (May 2011).
However, while the typical family has sought to pad out its savings cushion, the average credit card/loan/overdraft debt has actually increased from £5,360 (Jan 2011) to £5,878 (May 2011). One of the main drivers behind this trend appears to be families with children.
Indeed, families with two or more children saw their average unsecured debt increase from £5,248 (Jan 2011) to £6,200 (May 2011) and families with one child saw theirs increase from £4,404 (Jan 2011) to £5,452 (May 2011).
The cost of servicing debt as a percentage of household income has also grown from 8% (Jan 2011) to 10% (May 2011). This may indicate a desire to pay off unsecured debt but the figures seem to indicate that it may simply be servicing increasingly expensive borrowing.
With expenditure on almost all of the basic family costs increasing, most families have significant worries about what the next six months will hold. Almost two thirds (60% from 54% - Jan 2011) are worried about a significant increase in the cost of basic necessities and 39% (37% - Jan 2011) are worried about unexpected expenses and 20% (17% - Jan 2011) are concerned about rising mortgage rates.
While families have seen monthly incomes increase by 6% from £1,937 (Jan 2011) to £2,062 (May 2011), job security is still an issue. Marginally more people are worried about losing their job (48%) than they were in January (45%) as they struggle to keep up with the rising cost of living.
Paul Goodwin, head of pensions marketing, Aviva, said: “While it is great news that families are saving more, the fact that many have higher unsecured debts and have seen an almost blanket increase in day-to-day living costs is deeply concerning. UK families are worried about the future with almost two-thirds anxious about any increases in the cost of basic necessities over the next six months.
“This research really serves to highlight the precarious balancing act that many face today as they look to meet their financial obligations and provide their families with some type of financial security. At Aviva, we understand these fears and are actively working to ensure that we offer financial products which help families to make the most of the disposable income they do have.”
