28 percent of UK residents don't have enough cash to cover costs
25 January 2011
More than one-in-four (28%) of struggling UK residents are having to spend more money each month than they have coming in, according to new research by The Co-operative Insurance and housing and homelessness charity Shelter and Shelter Scotland.*
According to the research, the cost of outgoings such as rent or mortgage payments, living costs and fuel bills means that 28% of UK adults face an average shortfall of £165 a month, with more than a quarter (26%) uncertain whether they can pay their bills on time.
It also uncovered that 70% of people are worried about their cash flow, with 25 to 34 year-olds being the most concerned - three quarters of people in this age group (74%) admit to having money worries.
As housing and living costs continue to increase, the research shows just how hard people are finding it to get by. It also highlights some of the risks people are taking as they forgo essential items to stay afloat such as their home insurance.
The research shows more than a fifth of the population (22%) don’t think having home contents insurance is important, although nearly 80% of people say they’d be unable to afford to replace expensive items without it.
And according to findings, one-in-10 cash-strapped people in the UK (8%) even admit that they undervalued their home contents to keep insurance premiums down.
Lee Mooney, Head of Home Insurance at The Co-operative Insurance, said: “The results of our research with Shelter highlight the extent to which people are now feeling the pinch and show that a large number of people are being forced to spend more money than they can afford.
“Although times are tight and the vast majority of people don’t have spare cash, it’s important people prioritise what they need above what they want in the year ahead. It’s worrying to see that such a high proportion of people don’t think having home insurance is important, as without it they could be left open to serious risk and further unaffordable expenditure in the long run.”
The research was carried out to highlight the partnership between The Co-operative Insurance and Shelter and Shelter Scotland, which is raising money for the charity’s work to support people needing debt and housing advice. This winter The Co-operative Insurance has donated £5 to Shelter and Shelter Scotland for every new Co-operative Home Insurance policy raising £250,000 to help support the important work the charity does with people struggling to keep a roof over their head.
Graeme Brown, director of Shelter Scotland, the housing and homelessness charity, says: “2011 looks set to be a very tough year for hundreds of thousands of families across Scotland. With 28% of the population saying they don’t have enough income to cover their outgoings, sooner or later, something has got to give.
“The most worrying question raised by this survey is, to what lengths are people having to go to make ends meet?
“Recent research from Shelter Scotland showed that over 200,000 Scots have turned to their credit cards in the last year to pay their rent or mortgage, showing the desperate measures people are being forced to take because their incomes cannot keep up with the increasing cost of living.
“This is all happening at a time when the cost of living is increasing due to inflation-busting hikes in VAT and fuel prices and before harsh government cuts are still to hit home. We are very concerned about the long-term, harmful impact on many Scottish families and the communities they live in.”
For anyone who feels overwhelmed by their financial struggle it is crucial they get advice sooner rather than later. Specialist debt and housing advice is available via Shelter Scotland’s website. Visit www.shelter.org.uk or call the free helpline on 0808 800 4444 and get impartial and expert advice now.
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* Research conducted by OnePoll.com questioning a geographically representative sample of 3,000 UK respondents. Research carried out in November 2010.
Notes to Editors:
About Shelter Scotland - until there’s a home for everyone
We help thousands of people every year fight for their rights, get back on their feet and find and keep a home. We also tackle the root causes of bad housing by campaigning for new laws, policies, and solutions.
About The Co-operative Financial Services:
The Co-operative Financial Services (CFS) is part of The Co-operative Group, which is the world’s largest consumer co-operative with around five million members, over £14 billion turnover, and core business interests in financial services, food, travel, pharmacy and funeral care. The Co-operative Group has over 5,000 retail trading outlets.
Following the merger with Britannia Building Society on 1 August 2009, the new organisation is one of the largest and well diversified mutual businesses operating in both retail and corporate markets. As part of The Co-operative Group, the new business is characterised by its unique ethical and member reward policies and very high levels of customer advocacy.
The combined business has £70 billion in assets, 12,000 staff and nine million customers. It has over 300 high street branches, 20 corporate banking centres and a major presence in Leek, London, Manchester, Plymouth, Skelmersdale and Stockport.
It is the only mutual organisation that enables its members to earn financial rewards for the products they hold, as well as giving them the opportunity to have a say in how the business is run.
The Co-operative Home Insurance
• Free contents cover for 6 months when you take out buildings cover
• Free £50,000 legal expenses cover
• £5 donation per policy to Shelter
• Most of our customers pay £18 a month or less for their home insurance
• Up to 40% No Claims Discount for buildings and contents with option to protect once full entitlement has been earned