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61% of households 'don't feel financially secure at all'

By Helen Gradwell

17 August2021

Couple looking at household finances According to recent research by uSwitch.com, 35% of British people define 'financial security' as having enough in the bank to cover basic living costs - without having to resort to credit.

The research also found, however, that only 40% of them feel that they are in this position. The average monthly household income is currently 2,504 - but consumers have said that ideally they'd need 3,939 in order to feel secure financially. The average household therefore falls around 1,500 short of this goal. 61% of households say that they don't feel financially sure at all.

14% define financial security as not having any unsecured debts, like loans, overdrafts or credit cards to repay. Recent consumer credit figures from the Bank of England, however, show that people in the UK were carrying well over 200 billion of unsecured debts in June.

This lack of financial security can be blamed on a number of factors, such as rises in the cost of living. People are finding it increasingly difficult to cover the cost of petrol, food and energy, among other things. Along with this, only 30% of workers say they expect a pay rise this year, and 65% say they have suffered a pay freeze in recent years.

Personal finance expert at uSwitch, Michael Ossei, has this advice for those who are struggling: "Cutting back on credit and reducing your debt in the current climate is one of the best things you can do and will put more people back in control of their finances. And while many may feel unable to save, putting away as little as 10 or 20 per month can help to build a savings pot. Saving a little and often can make a big difference and cutting back on household bills like energy could free up some cash to help you feel more financially secure."

An expert from Think Money added: "If you're struggling to repay unsecured credit on your own, it can really help to seek some expert advice."

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Tags: households, debt, home, uSwitch.com, income, unsecured debts, overdrafts living costs

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