There are 11.8 million people in the UK who would be in the red within a month if they lost their job tomorrow, according to research published by AA Financial Services.
A new survey found 36% of people suggested they would be in financial arrears within a month if they lost their job tomorrow, rising to 51% amongst people who rent, AA revealed, using ONS data to calculate its nationwide figures.
Surveying a representative sample of 2,055 adults across the UK, AA’s research also found that three in 10 people indicated they had borrowed money to pay for the cost of Christmas – with a fifth of those who borrowed putting more than half the cost on credit cards. These figures also saw an increase amongst renters, to 33%.
AA director, James Fairclough, commented: “It’s concerning that so many people in the UK would not be able to maintain their lifestyle and provide for their families beyond a month should their circumstances change suddenly.
“This safety net is an essential part of being able to plan and stay on top of finances and is key to minimising any anxieties people may have about their future.”
AA’s research found that 36% of respondents indicated intentions to save more in 2020 than in previous years – with 27% suggesting they would be cutting back on luxuries, and another 20% planning to get rid of their credit cards.
The survey also indicated that just one in 12 people would be consolidating their debts into a loan with manageable monthly repayments.
“This could be the year, for the first time in over a decade, where national interest rates rise to a significant figure, giving swathes of people good reason to save more of their money,” Fairclough added. “The importance of savings is put into focus when planning for the future – not just the next year or two, but beyond this into retirement.
“As life expectancy gradually rises, the focus on staying on top of debt today becomes sharper. Cutting back or using a loan to consolidate existing debts can be a great way to do this, and the start of a new decade is as good a time as any to do it.”
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