Households in the UK have now been stretched to full capacity and would struggle to cope with any more increase in their monthly outgoings, according …
Households in the UK have now been stretched to full capacity and would struggle to cope with any more increase in their monthly outgoings, according to new research by Halifax.
Low wage inflation coupled with a rise in the costs of daily necessities and goods such as food and energy bills have caused people to reach breaking point with their finances.
Almost half of adults who took part in the survey (46 per cent) admitted they would find it difficult to cope if their monthly outgoings increased by up to £99.
The generations that are being stretched the most are those in their 40s (51 per cent) and 50s (53 per cent), with 18 per cent of both these age groups now so close to breaking point they would find it hard to take an increase in expenditure of just £24 a month.
This particular group of people have seen an above average increase in spending on essential expenditure. On average 26 per cent of households reported higher spending on fuel and energy bills over the last 12 months and this rises to 29 per cent for those in their 40s and 50s.
Additionally, nine per cent of households reported higher mortgage or rental payments, but this rose to 11 per cent for those in their 40s. Some eight per cent of households also reported an increase in food costs and it was nice per cent for those in their 40s.
Unfortunately, people are not optimistic about their financial future with 40 per cent of households expecting their general financial situation to worsen in the next year, with pessimism at its highest among those in their 50s (56 per cent).
Director of personal current accounts at Halifax Anthony Warrington said: "There is no quick way to ease the squeeze on households and many are already cutting back where they can. With so many households at full stretch it's even more important to make strict budgets and keep on top of finances and outgoings."
By James Francis