The latest MoneyMood Survey shows around 2.8 million households are worse off now than they were 3 years ago. The research shows a marked drop in “Expense cover”, the number of households who say they have some money left after paying bills each month, compared to 2007.
The last three years have clearly taken a toll on the number of households who have spare money after all their regular outgoings are taken into account. In September 2007 six out of 10 households said they had “some money left over after paying bills and debts”. At the end of September this year that had fallen to only half of households (50%). The remaining half of UK households, therefore, do not have enough left over to afford to save.
Commenting on these findings Mark Gregory, Legal & General executive director savings said: “Right across the country, no matter where they live, people are reporting that they’re worse off now than just a few years ago.
“Nationwide, the number of households with cash left over after paying bills and servicing debt has dropped significantly. Our latest figures indicate that half of UK households, around 11.5 million homes, are budgeting on a fine balance between managing to pay bills and sinking into debt. The financial turmoil of recent years has created an additional 2.8 million households for whom saving to “make ends meet” has become a necessity to cover bills and debt repayments.”
Mark added: “With the prospect over the next year of the return of inflation, higher fuel and food bills, an increase in VAT and, for some, the prospect of unemployment ‘Saving for a rainy day’ has perhaps never been more important than now.
“Despite deteriorating circumstances, or perhaps because of them, most adults in the UK say they are more inclined to save (60%) than spend (23%). However, our findings indicate that 10% of them can no longer afford to save compared to only three years ago.”
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