- Posted August 12, 2013 by
Southampton, United Kingdom
26 Million People Struggling Financially
Approximately 26 million Britons are presently having money problems because the economic
Approximately 26 million Britons are presently having money problems because the economic slump has induced a “live for the moment” mentality, based on a major report on the wellbeing of the country’s finances.
Over fifty percent of UK adults stated that they were struggling with their finances, the government-sponsored body, Money Advice Service (MAS), bared. This is a sudden increase from 35 percent of people who were undergoing a hard time paying their bills compared to the previous time a similar study was conducted in 2006.
Hourly salary has plummeted by 6 percent in real value since the previous research was carried out, making it more difficult for people to eke out a living.
A “live for the moment” culture and lack of financial smarts were also discovered to be possible reasons.
Twenty percent of those polled stated that they would prefer to have £200 at present than £400 after four months, with twenty-five percent of people replying they choose to live for the present rather than plan for the future.
The report also showed that a disturbing number of Britons are deficient in financial awareness.
About 12 percent of those asked believed the Bank of England’s base rate, which has been at a remarkable 0.5 percent low for over four years, was over 10 percent.
Over one third of the people asked did not comprehend the great effect that inflation has on their savings and 16 percent could not tell the right balance on a bank statement.
Nevertheless, more encouraging result from the survey revealed that the number of people checking their bank account statements had grown since 2006 and almost 84 percent of people said they constantly monitored their finances. 40 percent of those questioned said they stay clear of doubtful dealings and 85 percent said they were laying aside some money in savings.
Caroline Rookes, chief executive of the MAS, said: “In principle, financial management is easy –spend less than you make and think about your future – but the challenge comes from how we apply it in actual life.”
The MAS, an autonomous body established by the Government, has a legal duty of enhancing public awareness and knowledge about financial issues. It plans to publish a method to assist citizens improve their financial condition next year.
Over 5,000 people participated in the survey, with more than 70 families monitored over the period of one year for the Financial Capability of The UK Report, which uncovered “a common sentiment that people worry about their capability to endure until the next payday”.