Household bills leave Brits’ savings depleted
According to research, almost half of consumers who dip into their savings do so to cover the cost of household bills with energy prices a major bone of contention.
The data, which was reported on This Is Money , claimed that a staggering 42% of individuals surveyed admitted they used their spending to cover the cost of basic amenities, such as gas and electricity provisions, every month.
With news that energy suppliers could increase their prices even further, this means the situation surrounding household budgets is one which certainly needs to be addressed.
Budgets at breaking point
Whilst the fact 4.5 million people are using their savings to pay bills is shocking, what is more concerning is the fact this figure has been increasing steadily every year since 2009.
Considered alongside the fact that average energy bills are 23% higher than they were last January, with households paying almost £1,500 a year on this basic commodity, this paints a very dire picture for Brits.
With budgets already at breaking point, any additional price increases could spell financial ruin for consumers who are already struggling to make ends meet.
Reasons for spending
Whilst covering regular bills was the main reason why individuals spent their hard earned cash, it was not the only source of unplanned expenditure. Holidays and home improvements or repairs made up the second and third positions with 34% and 27% respectively.
The least popular reasons for overspending were buying clothing or other personal items as well as purchasing furniture and large items. Only 12% of respondents listed these activities as the reason why they dipped into their savings with eating out, socialising and car related purchases achieving a marginally higher result of 13%.
Ultimately, this proves that the vast majority of individuals are using their savings out of necessity rather than through choice.
Protecting your savings
Irrespective of your reasons for dipping into your savings, it is important that you take steps to protect your finances by boosting your bank accounts with a cashback credit card. These allow you to obtain rewards on expenditures, meaning that any slight deviations from your budget don’t need to have such negative ramifications.