- More than a third (37%) of people have ”just enough” money left over after paying for essentials to provide for themselves and their families, while 15% are left with nothing
- 62% are worried about their ability to provide for their household
- 52% say that their discretionary income has reduced; one in five (20%) say significantly
Research by PR consultancy MRM has found that more than a third (37%) of Brits only have “just enough” money left after paying for essentials to provide for themselves and their families, while 15% are left with nothing.
The findings of the firm’s latest Money Matters Index, in partnership with finance blogzine Mouthy Money, reveal the cost-of-living crisis is pushing many households closer to the breadline, with 62% of people worried about their ability to make ends meet.
More than half (52%) of the 2,000 respondents say their discretionary income has reduced due to inflation with one in five (20%) saying it has fallen significantly.
In order to keep on top of rising living costs, nearly a quarter (23%) of people say reducing their outgoings is currently their financial priority.
Over the past six months, many people have taken steps to change their spending habits and save money.
More than four in 10 (44%) have begun shopping in cheaper stores, 41% have decided to buy own brand products, 39% have eaten out less, 34% have taken fewer car trips to save on fuel, 30% have reduced spending on leisure and 17% have used their white goods less.
The need for households to reduce their outgoings is compounded by the fact that many people’s earnings are failing to keep pace with inflation.
Only 29% of Brits expect their income, including bonuses and overtime, to increase over the next 12 months.
To make matters worse, many people have found it harder to make regular contributions to their savings as their disposable incomes have been squeezed.
A third (33%) of respondents have stopped or reduced payments into their savings and investments because of rising costs.
Meanwhile, nearly one in five (18%) people have drawn money from savings or investments to deal with rising living costs.
Chis Tuite, head of consumer finance at MRM, comments: “Times are tough and they are set to get tougher as we head into the winter. So far, efforts by the government and the Bank of England have failed to tame runaway inflation. The spiralling cost of living is making it difficult for millions of people to get by and the impact of that should not just be measured in pounds, shillings and pence. Many families are barely able to make ends meet and levels of stress and anxiety in homes across the country will be inflating too.
“Our research reveals that savings piles are either spent or dwindling and the pressure is actually ramping up further as energy costs are set to reach unprecedented levels in the autumn. Without some form of financial safety net to fall back on, households may find themselves in a precarious situation if they suddenly face any further unexpected costs or increased bills.
“A sudden change in this turbulent macroeconomic picture seems unlikely. Further government intervention may well be required, but even then, it seems people are bracing for a very bumpy ride in the coming months and that is likely to impact long-term consumer thinking when it comes to saving, investing or spending in particular.”