Although more people are saving money, pressure on Britons' finances could still be set to increase, according to a new study.
In findings published in Birmingham Midshires' regular Saving Britain report, two-thirds of consumers (67 per cent) have some money set aside, in comparison to the 62 per cent recorded at the same time last year. However, as general living costs have increased over this period, the financial services provider indicated that there is a shortfall in the amount of money set aside. Over the last three months, the average Briton has saved some 910 pounds, down by a third from 2006's statistics which noted 1,376 pounds being put away.
The company also reported that recent increases by the Bank of England's monetary policy committee have currently left interest rates at a six-year high. Despite this, Birmingham Midshires stated that in spite of the resultant rising difficulty in making secured loans repayments, consumers should look to make as best use of the rises as possible and put money into savings schemes.
Commenting on the figures, Jason Robinson, director of savings operations for the financial company, claimed that regularly saving money can help consumers should they incur unexpected difficulties such as redundancy or illness and struggle to service debts. He said: "It's easier said than done but it's recommended that people have three months' salary put aside in case of financial emergencies - this equates to 5,899 pounds for those on an average income".
Research from the firm also showed that younger people are preparing more effectively for their financial future. Those between the ages of 18 and 24 were reported to have saved 1,523 pounds over the last three months. However, this figure more than halved for the over-55s who were indicated as putting 688 pounds away.
Men were also shown to be more conscientious savers as they have stored 1,105 pounds for a rainy day during the past three-month period, compared to 733 pounds for women. Those living in Scotland, meanwhile, were said to be most financially prepared. Some 86 per cent of consumers in the Scottish Borders region are revealed as having recently put money away, with those in the north of the principality have the most cash saved in Britain at 1,820 pounds. This compared to a third (33 per cent) of people in the south-west of England who have failed to put any money into savings accounts and so could be set to see increased pressure on their finances in later years.
Earlier this year, figures released by engage Mutual Assurance showed that women are better at managing their money than men. Some 70 per cent of females claim that they are able to budget their finances well despite on average earning less money than males, out of which 68 per cent are able to plan their spending. The study also revealed that some 40 per cent of those approaching middle age (between 35 and 44 years old) have the most difficulty putting cash away for the long-term, compared to 32 per cent of all Britons. Marketing director Karl Elliott claimed that: "By getting into the habit of saving more often Britons can help secure both their and their family's future".
Unwise Student Spending Can Leave Brits With 'Debt Mountain'
With students receiving their A-level results today, the thousands of young people who are set to head to university are being warned that a lack of financial planning could leave them with debt problems later on in life.
Pointing to research from the Association of Investment Companies revealing that university attendants are taking on more levels of debt than ever before, Callcredit has suggested that this could impact upon their ability to access borrowing after graduation, as they struggle to pay off credit cards and loans. And by constantly choosing to fund holidays and nights out through borrowing consumers could well be left with a “debt mountain” after leaving higher education.
The company pointed to the example of Lee Barnes. After graduating from Leeds Metropolitan University, the 25-year-old found himself owing more than 60,000 pounds as he increasingly took out personal loans to cover daily expenses such as paying rent. “The problem was I got used to spending money. I wasn’t even aware of how much I was taking on,” Mr Barnes commented.
Melanie Mitchley, Callcredit’s director of industry relationships, claimed that although higher education can prove to be a great experience, young people should take caution of the monetary difficulties they can incur if they do not plan their spending wisely. She said: “We are urging all students - whether freshers or in their final year - to be aware of the potential pitfalls if they don’t take control of their financial affairs.
“If you do decide to borrow money be aware of the amount you are borrowing and think about how you will repay it. Our experience has shown that taking on credit needn’t be a problem if you manage your finances well and ensure you keep up your repayments.”
Consequently, those considering taking out a loan or making an application for a credit card were advised to “think” before taking such action. The consumer debt expert also recommended that people should get a copy of their credit history as it will help them to “get an overall picture of the current state of your finances” and decide whether they will be able to successfully manage to take on further borrowing.
However, earlier this year, Mintel suggested that a rising proportion of young people are aiming to take the “easy” way of unmanageable money problems. According to a study carried out by the firm just over a fifth of consumers aged 18 to 34 - an estimated three million - are willing to file for an individual voluntary arrangement or bankruptcy should they find themselves unable to make debt repayments.
Senior finance analyst Todd Davis claimed that as overdraft extensions, credit card deals and student loan uptake all rises, those in this age group no longer have a “stigma” about getting into debt. Meanwhile, such consumers were reported to have above average levels of unsecured borrowing as an estimated 60 per cent of respondents in the age bracket have taken out the form of credit. With more than £3,200 revealed to be taken out, young people were shown as owing more than four times the amount that over-55s do via credit cards and personal loans.
Pointing to research from the Association of Investment Companies revealing that university attendants are taking on more levels of debt than ever before, Callcredit has suggested that this could impact upon their ability to access borrowing after graduation, as they struggle to pay off credit cards and loans. And by constantly choosing to fund holidays and nights out through borrowing consumers could well be left with a “debt mountain” after leaving higher education.
The company pointed to the example of Lee Barnes. After graduating from Leeds Metropolitan University, the 25-year-old found himself owing more than 60,000 pounds as he increasingly took out personal loans to cover daily expenses such as paying rent. “The problem was I got used to spending money. I wasn’t even aware of how much I was taking on,” Mr Barnes commented.
Melanie Mitchley, Callcredit’s director of industry relationships, claimed that although higher education can prove to be a great experience, young people should take caution of the monetary difficulties they can incur if they do not plan their spending wisely. She said: “We are urging all students - whether freshers or in their final year - to be aware of the potential pitfalls if they don’t take control of their financial affairs.
“If you do decide to borrow money be aware of the amount you are borrowing and think about how you will repay it. Our experience has shown that taking on credit needn’t be a problem if you manage your finances well and ensure you keep up your repayments.”
Consequently, those considering taking out a loan or making an application for a credit card were advised to “think” before taking such action. The consumer debt expert also recommended that people should get a copy of their credit history as it will help them to “get an overall picture of the current state of your finances” and decide whether they will be able to successfully manage to take on further borrowing.
However, earlier this year, Mintel suggested that a rising proportion of young people are aiming to take the “easy” way of unmanageable money problems. According to a study carried out by the firm just over a fifth of consumers aged 18 to 34 - an estimated three million - are willing to file for an individual voluntary arrangement or bankruptcy should they find themselves unable to make debt repayments.
Senior finance analyst Todd Davis claimed that as overdraft extensions, credit card deals and student loan uptake all rises, those in this age group no longer have a “stigma” about getting into debt. Meanwhile, such consumers were reported to have above average levels of unsecured borrowing as an estimated 60 per cent of respondents in the age bracket have taken out the form of credit. With more than £3,200 revealed to be taken out, young people were shown as owing more than four times the amount that over-55s do via credit cards and personal loans.
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