Millions of households in the UK are worried about their finances. But what can be done to change this?
Next Wednesday, Philip Hammond MP, will give his first Budget as Chancellor.
With our latest research finding that five million working people in the UK are now worried about their financial situation, we’re urging the government to use the Budget, along with the promised Green Paper on markets, to consider how it can deliver measures to help them.
We looked at how full- and part-time workers felt about their finances. We found that five million of them were struggling, and classed their financial situation as poor or very poor.
Overall, 28% of all UK households said they were experiencing some form of financial distress, be it relying more on overdrafts and loans, or struggling to pay their mortgage/rent and everyday household bills.
When we asked those working households who felt negatively about their financial situation, this rose to three in five (61%).
Others told us they were cutting back, while one in five (19%) people had defaulted on a loan, bill, mortgage payment or their rent.
Nearly two fifths (38%) thought their financial situation would get worse in the next year, with levels of household debt, fuel prices, housing costs, food prices, and household savings and investments chief among their concerns.
Green Paper on markets
In the 2016 Autumn Statement, the Chancellor announced that the government would be publishing a Green Paper on markets ‘that are not working fairly for consumers’. This is due this spring.
We welcome this and think it’s a great opportunity to finally crack the problems that consumers face in the critical markets, such as financial services, energy, telecoms and transport, and make sure these markets work better for them.
This should include looking at gaps that currently exist in consumers getting redress when things go wrong, or when they don’t get the service they were expecting.
More also needs to be done to encourage people to switch providers to get a better deal. Recent figures from Ofgem on the number of consumers switching their energy company are promising, but more needs to be done to ensure more people do it – and across all markets.
What can be done?
In her first statement in July last year, the Prime Minister said she’d be focusing on helping people who were ‘just managing’.
At a time when people are clearly feeling the pinch, we’re urging the government to use its upcoming Budget and the Green Paper to do just that.
We think it should consider how it can use both to deliver measures that will help ‘working and struggling’ families improve their financial situation and make the critical markets work better for them.
Do you consider yourself among the ‘working and struggling’? Or do you know someone who is? How can the Chancellor use the forthcoming Budget and Green Paper on markets to help?