Press releases

HOUSEHOLD FINANCES IMPROVING BUT AVERAGE SAVING IS FALLING AND STRUGGLING HOUSEHOLDS ARE WORSE OFF ACCORDING TO THE LATEST LEGAL & GENERAL MONEYMOOD SURVEY.

John Pollock - Group Board Director - Legal & General's Risk business
John Pollock
CEO
Legal & General Assurance Society

05 September 2013

John Pollock - Group Board Director - Legal & General's Risk business
John Pollock
CEO
Legal & General Assurance Society

Household finances on a more stable footing…

MoneyMood research reveals that household finances have improved in the last 12 months. More households (45%) say they have money left over after paying bills and debts than in July 2012 (40%). And fewer (11%) say they are struggling to pay bills and debts compared to the same period last year (16%). Household finances are clearly improving in 2013 as 89% of homes are able to cover paying bills and debts from monthly income. But for those whose earnings don’t cover bills and debts the monthly shortfall has doubled compared to a year ago.

MoneyMood Survey ® “Covering bills and debts” July 2012 vs. July 2013

To view the chart  showing the change in household finances year on year please click on the link on the right of this page.

Average monthly saving is down by 39% …

Across the nation we are saving less than this time last year. The latest figures show the average monthly saving (for those households who say they can afford to save) is £42 on average for the UK as a whole, down £27 per month (39%) since July 2012 (£69).

And monthly shortfall has doubled for struggling households…

Although 576,000 fewer households are struggling to pay bills and debts compared to this time last year, those who are seem to be in danger of falling deeper in debt. There has been a significant rise in average monthly shortfall (for struggling households), which has doubled year on year and now stands at £85 per month (£42 per month in July 2012 – up 102%). The chart (please see the link on the right) shows that, with the exception of the West Midlands, higher monthly shortfalls are being reported right across the nation.

Regionally the savings figures perhaps tell a different story:

How much can you afford to save at the end of each month?

(To view the chart  showing the change in average monthly saving year on year please click on the link on the right of this page.)

  • Saving is up compared to last year in London (up 80% - £44 pm), the South East (up 145% - £68 pm), the South West (up 149% - £70 pm), Wales (up 46% - £19 pm), East Anglia (up 49% - £26 pm), the North West (up 107% - £47 pm) and the North (up 320% - £109 pm).
  • Elsewhere saving is down compared to last year. East Midlands (down 50% - £83 pm), the West Midlands (down 11% - £13 pm), Yorkshire and Humberside (down 11% - £12 pm) and Scotland (down 44% - £49 pm).

How much are you short at the end of each month?

(To view the chart  showing the change in average monthly shortfall year on year please click on the link on the right of this page. Note - 2013 Figures for the East Midlands appear to be distorted by the small sample size and have been ignored.)

Household finances are stronger than last year:

Commenting on these findings John Pollock, Chief Executive Officer Legal & General Assurance Society said; “The good news is that more than half a million households are no longer struggling to make ends meet compared to the 3rd quarter last year.This is perhaps a good indicator that household finances are stronger now than in 2012. 

Our latest survey also shows that 1.4 million more homes say they’re in a position to afford to save compared to a year ago with some money left over after paying bills and debt. Even so not every region is reporting people are saving more, which suggests that some households may have decided to save less to prioritise paying bills and debts, while others may be taking the opportunity to splash out and spend a little. 

With inflation remaining stubbornly high and the Bank of England holding the base interest rate low it’s hardly a surprise that households are losing interest in saving and the mood to spend is growing.

Perhaps a worrying development is the sharp rise in the monthly shortfall for those households who say they’re struggling to pay the bills. It appears that those unable to cover bills and debt from their income are seeing their monthly shortfalls growing significantly. 

As we move into the colder months and fuel bills begin to rise there may be difficult times ahead for these struggling households. We will be monitoring ‘Fuel Poverty’ again this year and will publish these figures next quarter.”

REGIONAL DATA – change in the number of households that can afford to save and the number who are struggling to survive:

Across the UK the number of households saying they can afford to save – i.e. “have money left over after paying bills and debts each month” has risen by 1,390,500 year on year. Compared to Q3 2012 the number of homes saying they can afford to save is much higher in every region except in London, Wales and Scotland.

The number of households who are spending more than they earn to pay bills and debts is down year on year in every region except East Anglia and Scotland (note – no figures for East Midlands due to a slight sample distortion).
(To view the Regional Table showing the change in the number of households that can afford to save and  the change in the number of homes  that are struggling to pay bills please click on the link on the right of this page.)

Notes to editors

SURVEY – METHODOLOGY
Research for the Legal & General MoneyMood Survey was carried out by TNS Omnibus.
Telephone interviews were conducted among a nationally representative sample (in GB) of around 1,000 adults (age 18+) between, 27-29 July 2012 and 19-22 July 2013.
The information contained in this press release is intended solely for journalists and should not be relied upon by private investors or any other persons to make financial decisions.

THE LEGAL & GENERAL MoneyMood Survey is a trade mark registered by Legal & General plc.


For more information please contact:

Mike Connolly

Mike Connolly

About Legal & General

Legal & General Assurance Society Limited.

Registered address:
One Coleman Street
London EC2R 5AA.
Registered in England 166055.

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