Inflation Hits Families as Unsecured Debt Rises
Families’ savings are up but so are their debts new research highlights, as inflation pressures makes it hard for many to balance their books.
Those families with children have been shown to hold more unsecured debt, according to the latest Aviva Family Finances Report.
Of the UK population 84 percent of the nation lives as part of a family, and these people have major financial concerns over the next six months.
The average loan debt has increased from £5,360 in January 2011 to £5,878 in May 2011, even though the typical family has £1,163 in savings and investments compared to £849 in January 2011.
“While it is great news that families are saving more, the fact that many have higher unsecured debts and have seen an almost blanket increase in day-to-day living costs is deeply concerning,” said Paul Goodwin, Aviva head of pensions marketing.
“This research serves to highlight the precarious balancing act that many face today as they look to meet their financial obligations and provide their families with some types of financial security.”
The good news is the number of families with no savings put aside has fallen from 33 percent at the beginning of the year, to 28 percent in May.
However, families with two or more children saw their average unsecured debt increase from £5,248 in January 2011 to £6,200 this month.
The Cost of Running a Home
Expenditure on almost all of the basic family costs is increasing due to inflationary pressures, causing 60 percent, up from 54 percent in January, to worry significantly about what the next six months will hold.
According to research by Halifax bank, the annual cost of owning and running a house is 1.4 percent more expensive than it was last March 2010.
This includes costs such as mortgage payments, council tax, utilities, insurance, maintenance, household appliances and the cost of toiletries.