UK shakes up a mix of ‘quick fix’ finance as more than half can only cover 50% of their bills
As the cost of living crisis escalates, most of the UK are no longer making ends meet. More than half (51%) now admit that they can afford only half (48%) of their regular outgoings.
Independent research from Metro Bank shows that two thirds (66%) 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 (47%) combining two or more of the following fixes:
- Prepayment Freezes
Almost a fifth (18%) 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 (23%) of 18 – 34 year olds. The South East and East Midlands were the areas least likely to take this route (just 12%), whereas it is a serious plan of action for those in the North East and Yorkshire & the Humber (23%).
- Savings Plundered
Over a fifth are now dipping into hard-earned savings regularly (22%), with over one in ten (12%) admitting to now taking money from their children’s bank accounts. With two in five (38%) 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
18% are now relying on credit cards for basic expenses. This habit is the most common amongst 35 – 44 year olds (23%), closely followed by 25 – 34 year olds (20%). However, 45 – 54 year olds are the least likely to rely on their credit cards (14%). People based in the West Midlands and the East of England were the most reliant on cards (22%), whereas only 4% of people in Northern Ireland were using this as a way help them in the coming months.
Buy now, pay later schemes are being used by 14% today, with one fifth of North East respondents (21%) most likely to depend on them, followed by those in the East of England (17%) and Wales (16%). The method is a young person’s choice, too, with 18 - 24 years olds being most likely to spread out their expenditure in this way (17%).
- Payday Rainy Days
One in ten (10%) are now relying on payday loans, with this habit again most prolific amongst the younger generation aged 18-24 (14%). Pensioners aged 65+ are on a par with their younger counterparts, with 13% 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 (14%), a trend, however, not echoed further north, where just 4% in Yorkshire and the Humber would even consider them.
- Bank of Friends and Family
One in ten are already now borrowing money from family (13%) or friends (12%). London prices are taking their toll, with borrowing from friends most likely in the city (16%), matched with London occupants’ reliance on family funds (16%). Just 5% of people from Yorkshire would borrow from their flesh and blood, - similar to East Midlands (just 6%).
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 (22%) are committed to taking holidays, eating out (18%) and enjoying streaming services like Amazon Prime or Netflix (18%) – and similar numbers will continue to dig into a regular takeaway (16%).
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, 47% 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 (17%) of us head to our bank for support and expert advice most are turning to loved ones to help out with money worries (friends 39%; family 36%; co-workers 31%). More worryingly one in three (32%) don’t speak to anyone at all.
A quarter of us don’t have faith that our bank would help us (24%), with a similarly high number actually being ‘afraid to’ approach their bank (22%). An additional 18% fear they would get into additional debt and 10% are worried their bank would ‘tell them off’ (doubling to 20% for 18 – 24 year olds). It is therefore revealing that nine out of ten (94%) 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/.