By Aisling Finn on Monday 19 July 2021
One in ten adults experiencing money woes anticipate having to borrow money to cover the cost of essential bills over the next year.
Despite today being the long-awaited ‘freedom day’, many UK adults are still feeling a pandemic-related tug on the purse strings.
New research from Yolt has found that 17 per cent of adults (8.7m) are ‘financially stretched’ and a further ten per cent expect to still be struggling to make ends meet over the next 12 months.
Just over a fifth (21 per cent) say their money woes come from a fall in income, with 15 per cent saying that they had long periods of time without access to disposable income for non-essential spending, with 28 per cent of those without access to disposable income attributing it to shift work and zero-hour contracts.
Those who still find themselves ‘financially stretched’ anticipate having to borrow money to cover essential bills (ten per cent) or simply being unable to pay them (seven per cent).
“Our research shows that despite restrictions easing and signs of economic recovery, the pandemic continues to have a very real impact on the finances of many UK households. This stretched group, despite showing good financial behaviours such as budgeting, are still struggling,” Pauline van Brakel, chief product officer at Yolt, said.
“It’s vital that people who see themselves in this position, and those at risk of becoming financially stretched, continue to engage with their finances, in order to avoid a situation where they lose track of essential bills or see their monthly commitments spiral beyond their control.”
More than one in ten adults (12 per cent) saw their monthly expenses exceed their income last year, leading to an average overspend of £277 per month, indicating that we could see a rise in household debt here in the UK.
“It can be easier said than done, but beyond reviewing expenses and budgeting, where possible consumers should look to reduce debt, as this not only means alleviating financial pressure but can mean more money in your pocket in the long run,” van Brakel added.
Yolt also found that those experiencing a pinch on the purse strings were 20 per cent more likely to review their budget and expenses than those who are deemed ‘comfortable’ (89 per cent vs 69 per cent).