Millions of families are just 19 days away from subsistence and would struggle to afford the bare necessities within three weeks of losing their income, study finds
- Millions of families are 19 days away from being unable to afford basic necessities
- Figures come from Legal & General’s Deadline to Breadline report
- The report found that the financial resilience of UK households had fallen by 21%
Millions of families are just 19 days away from being unable to afford basic necessities, a study has found.
Soaring energy, food and fuel bills mean that households are forced to dip into their savings to cover imperative bills.
However, the cost of living squeeze is such that this savings safety net will generally fail after 19 days if families were to lose their income.
The figures come from Legal & General’s latest Deadline to Breadline report, which found that the average financial resilience of UK households has fallen by 21% since 2020 – from 24 days to 19.
He revealed that people typically overestimate by almost six weeks how long they could fund basic living expenses if they lost their income.
Millions of families are just 19 days away from not being able to afford basic necessities, study finds
The researchers found that two million adults typically ran out of money at the end of each month, an increase of 330,000 over two years.
It comes as a council announced it would map out ‘warm spaces’ where people struggling to heat their homes can take shelter.
Birmingham City Council is one of many local authorities to identify places such as libraries and art galleries where people can warm up for free.
The study found that household energy bills rose by a record 54% in April, while another 80% rise is expected from October 1.
The typical annual bill is expected to rise from £1,971 to around £3,549 in the autumn and is then expected to rise to over £4,500 from January 1.
Households have an average savings of £2,431 and debts of £610. Given average daily expenditure of £93, this would see the average household run out of money in less than three weeks if they were to lose their income.
Concerns are particularly strong for the UK’s poorest workers. Those earning less than £20,000 a year – five million people – live paypacket to paypacket and, on average, have no savings safety net.
The study found that even the majority of those with no debt and a higher income – over £50,000 a year – are more cautious. Some 61% of this group reduce the essentials.
Legal & General’s recent Rebuilding Britain Index found that the cost of living crisis is increasing inequality between different parts of the country, disproportionately affecting households in areas where there is greater need for recovery initiatives. leveling.
Soaring energy, food and fuel bills mean households are forced to dip into their savings to cover imperative bills
Older workers – between the ages of 55 and 65 – generally have higher levels of financial reserves to draw on, meeting their expenses for an average of 99 days in case they lose their income.
Legal & General Retail managing director Bernie Hickman said: “Our latest research presents a challenging picture for working households across the UK. We often talk about managing money from month to month but, as our findings indicate, for some it is day-to-day management.
“The cost of living crisis is squeezing people’s purses across the country, leaving households of all shapes and sizes with money worries.
“The fact is, there’s not much people can do to manage their budget in these trying times, but there are resources available that can help.
“Half of all people in the UK have not taken advantage of the financial advice available, including free services like MoneyHelper, to make the most of what they have. It may seem overwhelming, but we encourage people to do what they can now so that they are better prepared for yet another financial squeeze this fall.
Families are just 19 days from the bread line and would struggle to afford the bare necessities