Pay freezes and the rising cost of everyday living have made six in every ten Brits feel financially insecure, new research reveals.
The increasing cost of living expenses, including petrol, energy and food means that many Brits are struggling to keep up – in particular those whose living expenses were not compensated for by pay rises.
Salaries have risen at a rate of just 20% while energy prices have shot through the roof with an increase of 140% since 2004. Two thirds of workers have suffered pay freezes in recent years, while just three in ten expect a pay rise this year.
The average monthly income currently stands at £2,504, but independent price comparison and switching service uSwitch.com found that consumers believe they need to be bringing in £3,939 in order to feel financially secure.
Taking this into account, the average British household is £1,435, or 36%, short of being financially secure.
Michael Ossei, a personal finance expert at uSwitch.com, said: “The dream of financial security seems a long way off becoming a reality for many.
A third of Brits define being financially secure as having enough to cover basic day-to-day living expenses without having to rely on credit, but just two in five of these people say they are in this position.”
The second most popular definition of ‘financially secure’ is to have a minimum of six months’ salary in the bank, but of these just 35% actually have this.
One in ten people define financial security as not having any debt on credit cards or loans, or an overdraft that needs repaying.
However, recent figures from the Bank of England revealed that unsecured customer credit shot up from £408 million in April to £635 million in June.
Making cutbacks and budgeting is the most effective way to manage your finances. Unfortunately, however, budgeting is not always enough. Unsecured loans are available to help keep on top of things.
As with any form of borrowing, it is important to ensure that you are able to meet repayments and fully understand the terms and conditions attached to your loan.