AS THE cost of living crisis escalates, research revealed today shows most of the UK are no longer making ends meet.
More than half (51per cent) now admit that they can afford only half (48per cent) of their regular outgoings and people in this region are among the most reliant on credit cards.
Independent research from Metro Bank shows that two thirds (66per cent) admit to financial worries, and those struggling to pay their way are doing so with a cocktail of short term financial
solutions, with nearly half (47per cent) combining two or more of the following fixes:
Prepayment Freezes
Almost a fifth (18per cent) revealed they were going to halt prepayment direct debits and standing orders on energy bills completely this year.
There was a huge age difference when it came to pressing stop. Only one in ten of those aged over 45 were considering this option compared to almost a quarter (23per cent) of 18 to 34 year olds.
The South East and East Midlands were the areas least likely to take this route (just 12per cent), whereas it is a serious plan of action for those in the North East and Yorkshire & the Humber
(23per cent).
Savings Plundered
Over a fifth are now dipping into hard-earned savings regularly (22per cent), with over one in ten (12per cent) admitting to now taking money from their children’s bank accounts.
With two in five (38per cent) having less than £2,000 to fall back on anyway, people don’t have a significant savings pot to dip into at a time when outgoings are set to rocket.
Card Happy
Eighteen per cent are now relying on credit cards for basic expenses. This habit is the most common among 35 to 44 year olds (23per cent), closely followed by 25 to 34 year olds (20per cent). However, 45 to 54 year olds are the least likely to rely on their credit cards (14per cent).
People based in the West Midlands and the East of England were the most reliant on cards (22per cent), whereas only four per cent of people in Northern Ireland were using this as a way help them in the coming months.
BNPL
Buy now, pay later schemes are being used by 14per cent today, with one fifth of North East respondents (21per cent) most likely to depend on them, followed by those in the East of England
(17per cent) and Wales (16per cent).
The method is a young person’s choice, too, with 18 to 24 years olds being most likely to spread out their expenditure in this way (17per cent).
Payday Rainy Days
One in ten (10per cent) are now relying on payday loans, with this habit again most prolific among the younger generation aged 18-24 (14per cent). Pensioners aged 65 and over are on a par with their younger counterparts, with 13pc saying they are now more likely to use payday loans as a source of income.
High outgoings in London are leading to desperate Southerners reaching for a payday solution (14per cent), a trend, however, not echoed further north, where just four per cent in
Yorkshire and the Humber would even consider them.
Bank of Friends and Family
One in ten are already now borrowing money from family (13pc) or friends (12pc). London prices are taking their toll, with borrowing from friends most likely in the city (16pc), matched with
London occupants’ reliance on family funds (16pc). Just 5pc of people from Yorkshire would borrow from their flesh and blood, – similar to East Midlands (just 6pc).
No Sacrifice: Paradoxically, there are some areas of life that the UK is just not willing to give up, even as cash pressure mounts, as over a fifth of us (22pc) are committed to taking holidays, eating out (18pc) and enjoying streaming services like Amazon Prime or Netflix (18pc) – and similar numbers will continue to dig into a regular takeaway (16pc).
The survey of 2000 UK adults, conducted by OnePoll for Metro Bank, raises concerns as experts warn against turning to ‘sticking plaster’ solutions to meet household expenses. Yet, 47pc are using a combination of credit routes just to get through the month.
David Thomasson, Managing Director of Banking Products and Digital at Metro Bank urges people to speak to their bank before making decisions or changes to their payments:
“Short-term money solutions could lead to a lot of financial heartache later. It is worrying to hear that six in ten people are suffering with mental health issues due to the cost of living crisis.
“Some of those attractive ‘quick fixes’ could lead to longer term issues.
“The next 12 months are going to be difficult for many households, but everyone should try and take a moment to consider the most appropriate options that deal with their most immediate financial needs.”
While just one in five (17pc) of us head to our bank for support and expert advice most are turning to loved ones to help out with money worries (friends 39pc; family 36pc; co-workers 31pc). More worryingly one in three (32pc) don’t speak to anyone at all.
A quarter of us don’t have faith that our bank would help us (24pc), with a similarly high number actually being ‘afraid to’ approach their bank (22pc). An additional 18pc fear they would get into additional debt and 10pc are worried their bank would ‘tell them off’ (doubling to 20pc for 18 to 24 year olds).
It is therefore revealing that nine out of ten (94pc) of those who DID approach their bank said their financial woes and worries were eased.
David Thomasson added: “If you have any money worries at all it’s important that you seek help. You
don’t need to feel alone. Please talk to your bank or one of the many expert charities who can give
guidance and provide a range of options for you to consider.”
If you are struggling, visit Metro Bank’s cost of living hub for support and tools to help you deal with debt and money worries. Alternatively, visit your local store to chat with one of our
experienced advisors.
To find your closest store, visit: https://www.metrobankonline.co.uk/store-locator/
