Whether on benefits, or part of the ‘middle-class’, economic slavery is slowly but surely spreading like a pandemic throughout the country.
A report by the Money Advice Service, The Financial Capability of the UK, revealed that 50% of the UK population are struggling to keep on top of paying bills and credit commitments – up from 33% in 2006.
Less than a third of the population pay into pension plans or have life insurance because of tighter finances as a result of the financial downturn and a drop in income. 21% of the population have seen a reduction in their earning capacity together with earnings having less real value than six years ago.
With financial uncertainty ahead, unfavourable interest rates, uncertainty about the future worth of pensions, and a drop in the real value of their income, a quarter of people say they prefer to ‘live for today’ rather than plan for their financial future.
Although two thirds of the population agreed that it is a good idea to save money, only 44% have saved up more than three months income. Young families concentrate on paying debts and have little or no spare cash to save. Few people have savings which could be used if they have unexpected expense, with many turning to family and friends for help.
According to the report, most people are worried about making finances stretch to the next payday and give little consideration to planning for the future or unforeseen emergencies.
In another survey by the Money Advice Service, one in three of the 1,824 people surveyed said money owed on credit and store cards is the cause of most distress, while one in seven identified overdraft charges as the main issue. Just over one in ten said mortgage repayments gave them the most stress.
The rising cost of living is identified by one in two people for driving them into debt, while one in seven said unemployment was the reason they fell into the red. A similar proportion of respondents admitted to spending on non-essentials, such as luxuries and leisure activities caused them to overspend.
Age UK found that money worries among the over 50s stemmed from concerns about their employment status. The charity identified keeping or finding a job as being a key concern and discovered that half of unemployed people aged between 50 and 64 have been out of work for more than a year.
Finding employment is likely to get harder as the over 50s approach retirement age, despite pressure on them to work for longer before receiving a state pension.
Low interest rates on savings and poor returns on annuities is another factor that has knocked confidence, and may account for Age UK’s finding that just under two fifths of over 50s feel positive about the future.
The disability charity Scope uncovered a worrying trend in recent research.
Disabled people are more likely to be turning in desperation to high-cost loans and sometimes illegal lenders to pay bills and make ends meet. One in ten disabled people say they have used doorstep lenders so they can afford to pay household bills – compared to 3% of the general population.
As the cost of living rises and household income becomes devalued more and more people are failing to cope with the stress of providing the basics for themselves and their families.
The main contributing factors are the increased cost of basics, such as food, power – with electricity and gas prices continue to spiral upwards, remaining unregulated – reduction in income from benefits, and higher indirect taxation.
Many people are affected by debt they have incurred through credit arrangements, from mortgages to personal loans and credit cards. Some people constantly live to the limit of their bank overdrafts, with many struggling to make minimum repayments.
Economic slavery is a reality in the UK right now, and it won’t be getting any easier in the foreseeable future.
In the artificial world of ‘credit’ it is only the banks and government who benefit from people desperately trying to juggle reduced finances as they are squeezed for every last spare penny they have.