Survey finds that most Britons are living on the financial edge


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The Independent Online

More than two thirds of UK families are now "just getting by", while one in five has been forced to use payday loans or borrow from relatives to pay some of the most basic of bills.

The shocking findings, which also revealed 13 per cent of families were skipping meals in order to make ends meet, were included in a survey published this week.

The Centre for the Modern Family, a think-tank set up by life and pensions provider Scottish Widows, said its research showed just how desperate things were for many once-affluent UK families.

One in five of the 1,600 adults questioned, said they were struggling to cope financially and that bills were often missed or paid late. A further two in five said they were just about "getting by".

Only 7 per cent of families were finding life 'financially comfortable'.

Increased living costs and falling wages, combined with the rising cost of childcare, were cited by many families as the main reasons for the financial squeeze.

Younger families appeared to be those most affected by the recession.

The centre found that 32 per cent of 18- to 34-year-olds were more likely to have resorted to selling items online in the past 12 months to make ends meet compared to the UK average of 22 per cent.

Younger people were also twice as likely to have taken out a payday loan to afford their lifestyle.

The centre said based on the survey findings, at least one in 10 people were taking out payday loans, compared to four per cent of all adults.

One-in-five young people had also been been left unable to pay household bills and one in eight, or 13 per cent of all families, have skipped meals to ensure their family eats well.

The centre's survey said it found families were pulling together as times got tough. One-in-five adults had borrowed money from family members duringthe past year, and one in 20 said they had moved back in with their family to save money.

The centre, which was set up in 2011 to carry out in-depth research into family life, said women had been more affected by the recession. They were more likely to be unemployed (18 per cent) compared to 14 per cent of men, and 23 per cent of women have been forced to borrow money from family, compared to 14 per cent of men.

Lord Leitch, chair of the centre, said: "Young people in particular are being hardly hit and face a very different kind of working life from the one that their parents and grandparents experienced. Affordable housing and a comfortable retirement can no longer be taken for granted so young people now face an uncertain future."

For many families, managing finances can seem an impossible task, but there are things even the most cash-strapped can do.

Cary Cooper, professor of organizational psychology and health at Lancaster University, said: "The important thing is to be pro-active. Never underestimate how much difference small differences can make."

First he recommends families keep their debts in one place.

He said: "If you must have a credit card, have just one. Juggling credit cards is a worry in itself. Your debts will be more manageable if they are in one place. If you have several you'll end up getting into debt to pay off another."

Families also need to wean themselves off credit, he said.

"There's been a huge boom in zero per cent credit cards, but in many cases these have meant we've bought things we wouldn't have done if we'd had to survive on our salaries alone.

"It's worth remembering that when you think you are worse off, or you can afford that expensive holiday or designer gear."

If you have to borrow money from your family have a repayment plan.

Professor Cooper said: "Set up a standing order for a minimum amount so that you are doing something about paying that money back, even a small amount, £5 to £10; you can always increase it at a later date."

Families should aim to both plan ahead and review their finances.

"Have a monthly meeting where you spend time going through where money was spent the previous month and look at where you are going to have to spend money in the month ahead," said Professor Cooper

"Have the meeting at a time when you aren't tired, and have time to talk, such as a Saturday morning."

If you are in debt, or having problems making ends meet and you do not have family to turn to, there are other alternatives.

"Asking for help is another way of taking back control and being pro-active," said Professor Cooper. "Internalising your money worries will make them worse and will make you ill. A good place to start is a Citizen's Advice bureau."

Having a financial mentor may sound prosaic, but Professor Cooper said those who cannot rely on parents for advice would benefit from having financial guidance.

"Is there someone you know who is good with money? Make friends with them, and if you already are, ask them how they do it," he said.

When it comes to earning money, no job is too small. Professor Cooper said those out of work should be prepared to downsize, if they have not done so already.

"I know a friend who took a job cleaning. It didn't fit their qualifications or experience, but for them working was better than being at home worrying about money.

Being out there and earning money, no matter how much, is another step towards financial empowerment," he said.

The most difficult aspect of the recession for many families was the necessity to review their priorities.

He said: "This is especially difficult for young women and men, who tend to live in the now and there's evidence they are putting luxuries on credit.

"Of course, there is immense pressure to spend money to look good, and go out.

"There's no easy answer to this dilemma, but having role models who are confident and don't spend money to make themselves feel better is what our young people need now."

Case study: Young family struggles with bills and rising costs

Cat Price, 33, is a project manager for the NHS and lives in Birmingham with her husband, Martin. They have two young children, 18 months and 4 years.

"I started university in the first year of tuition fees and am still paying back my student loan over a decade later," she said. "To be honest, it hadn't really occurred to me back then how long I would have that hanging over me."

"We pay £1,200 a month in childcare. We both need to work to make ends meet. Even so there have been times when we've had to put things on credit to get by.

"Luckily, though, we can afford our mortgage because it is linked to the base rate. A lot of our friends are not in such a good situation.

"For us, the rising cost of everything has meant we have no choice but to take a more organised approach to monitoring our debts, finding ways to save money including things like childcare vouchers, which make a big different to the cost."

"Of course, as well as all of this there is always the spectre of redundancy as I work in the NHS and my husband works for a small engineering company.

"We've also had to make the decision that I will stop paying into my pension for the time being which does worry me."

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