Rising inflation and stagnant pay has left many people struggling financially, with just 15% of the population saying they are living comfortably.
A third (32%) of adults aged 18-70 surveyed believe their financial situation will get worse over the next 12 months according to new research published by the CIPD, the professional body for HR and people development.
The survey also reveals that while 15% of UK adults say that they are living comfortably financially, almost half say they are ‘just about managing’ (30%) or finding things difficult or very difficult financially (18%).
Among those who identify as ‘just about managing’ financially in the survey, a group specifically identified as needing help by the Prime Minister, three in five (60%) would struggle to pay an unexpected £500 bill while more than three quarters (79%) of them would fall behind on key living expenses within three months if they lost their main source of income.
This demonstrates the daily battle that many people are facing when it comes to managing their personal finances.
Commenting on the survey and other research, CIPD Acting Chief Economist Ian Brinkley said:
“The fall in the value of the pound following the vote to leave the EU has pushed inflation up with further increases expected in 2017, meaning many workers could see a squeeze on the value of their wage packets over the year ahead. This is concerning given our research clearly shows that there is little room for manoeuvre when it comes to many people’s personal finances.
“It is clear that many people in the UK are living hand to mouth, and that a loss of income or an unexpected bill would present a serious financial challenge for them. It is therefore unsurprising that so many people are not saving for retirement, with the daily pressures of financial life making it difficult to save for the future.
“There is a clear risk that any financial hit, either as a result of Brexit negotiations or otherwise, could have a very damaging effect on fragile household budgets. This is especially true for those who are ‘just about managing’, as they are far less likely to have access to emergency savings.
In the survey conducted by YouGov, it was also revealed that:
- One in four (27%) of workers are not currently saving for retirement.
- 42% of UK adults would find it difficult (20%) or very difficult (22%) to suddenly find £500, for example to pay an unexpected bill.
- Nearly half (49%) of UK adults feel unconfident that they will have enough money to live on when they retire.
- One in five (22%) UK adults would fall behind on key bills within ONE MONTH if they lost their main source of income.
The results follow a separate report earlier this year that showed one in four people are performing poorly at work due to money worries, again highlighting the key role that employers have to play when it comes to ensuring their workers are coping financially.
“The prevalence of financial insecurity shown by these figures make it very likely that almost every workplace will have someone who is struggling financially. Our research suggests that financial worries have an adverse effect on employees’ health, happiness and productivity, so besides being the right thing to do, it is employers interests to invest in providing financial advice, guidance and support to their staff.“The Government also has a key role to play by ensuring that the education system teaches young people how to apply the numeracy skills they are learning to the real-life personal finance situations they are likely to face.”