Half of UK adults struggling with their finances

Posted by Ian Carpenter in Credit Crunch on 7 August 2013 - Ian is Operations Director at checkmyfile

There are an increasing number of signs that the economy is slowly starting to turn around, but millions of adults in the UK must be wondering when they will start to see the benefits as a report reveals that 26 million workers are struggling to repay debt and settle their bills.

The Financial Capability Of The UK report by the Money Advice Service reveals a culture of dealing with the financial pressures of here and now rather than preparing for the future – a natural consequence of the recession but a recipe for disaster, especially with the future of state pensions still uncertain. The survey reveals a lack of understanding on pensions, with one in seven of those surveyed under the age of 35 assuming that it is better to start making contributions in your fifties rather than your twenties.

Based on a survey of 5,000 people and more than 70 families over the last 12 months, the report announces that there is a general concern from people about their inability to financially make it to the next pay day - a staggering 18 million workers regularly run out of cash before payday each month. It’s no wonder that payday lenders are making hay in the current climate. The report states that “people are focusing more on the here and now than on planning for the future, including for unforeseen emergencies.”

While an increasing number of UK adults are struggling to get by, consumer confidence is on the rise. The latest quarterly Nielsen survey reveals a rise of 4 points, to 79, up to the end of June, but still some way below the magical 100 point barrier which would reflect general optimism.

If the UK is to turn its economy around then further improvements in both consumer confidence and the financial stability of adults across the country are absolutely vital. Without either of these, it could be an even longer road to recovery.

Ian Carpenter is Operations Director at checkmyfile, has a degree in Business Studies, and is a Graduate Member of the Institute of Credit Management. He can be contacted at ian.carpenter@checkmyfile.com

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