Study: Large Number of UK Residents Living Paycheck to Paycheck, Can’t Handle Expenses
More than a third of the UK population is 30 days away or fewer from financial crisis, according to new research from Prudential.
The life and pensions provider conducted a study into British employment and financial planning, and found that an alarming number of working residents admit to having little or no savings. Sufficiently covering expenses, should they stop working, is very unlikely for many British citizens.
This means that they are effectively living from payday to monthly payday with little to no buffer. Is a surge in payday loans far off?
One in 10 working adults, equivalent to 2.9 million people, said they were concerned about their financial future, fearing their jobs were in imminent danger. Job insecurity is increasingly becoming a worry for the population as unemployment levels are at four-year highs.
"No-one likes to think that they could get a severe illness or lose their job, but what if the unthinkable happened? Without any savings or protection, many people put themselves in a vulnerable position," said Angus Maciver, Business Director of Insurance at Prudential UK.
In fact, 30 percent of respondents said that they had no insurance to cover job loss or redundancy. Only 1 in 10 said that they could cover periods without employment. That makes British citizens prime target for online payday loan solicitations in the event that they come up short on cash at a critical period.
The problems of rising consumer debt have been well reported, and this could be one reason for the widening savings gap. Many banks highlight a rise in personal bankruptcy in their results as customers struggle to meet repayments on credit card and personal loans.
The findings come weeks after Prudential released the results of its six-monthly Retirement Index, which discovered one in four pensioners, more than 2.7 million people, did not have sufficient income to cover all of their financial commitments. Working Britons must take adequate steps to ensure their future.
"We urge people to contact a financial adviser to plan their finances, in order to achieve their everyday financial aspirations," Maciver said.
Prudential believes the answer lies in overall financial awareness, but also in life insurance products, such as its Flexible Protection Plan. Customers can use the plan to help to cover mortgages and provide general financial support in the event of illness or death.