With the recent news that inflation has risen to 2.6%, consumers are increasingly concerned that their budgets will not stretch to meet rises in the cost of living.
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New research from uSwitch.com has revealed that British households require almost £4,000 a month just to feel financially secure, yet many fall short of this figure by a staggering £1,435.
It’s no surprise then that six in ten people don’t feel financially secure at all, as the gap between income and expenditure grows.
Two thirds of people have been subject to a pay freeze in recent years, with less than a third of employees hopeful of increases to their pay this year.
More than a third of Brits equate financial security with having the means to meet everyday expenses without resorting to credit.
Of this group only 40% feel they have achieved this. For 16%, financial security means having at least six months’ salary in the bank. However, just 35% of this group say they are in this position.
For 14% financial security means not having loans, overdrafts or debt on credit cards to pay. The increasing insecurity in the jobs market may be responsible for the fact that less than one in ten associate financial security with having a job with a regular income.
Recent figures from MGM Advantage showed that households would need to spend an extra £897.73 a year, or a collective £23.6 billion a year, to maintain standard of living they enjoyed 12 months ago.
“The surprise rise in inflation will come as a shock for many people who continue to feel the pinch,” said Aston Goodey, of MGM Advantage.
“Each UK household will somehow need to find an extra £897 a year to maintain their standard of living, or as many millions of UK families have seen, their standard of living falls dramatically.”
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