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‘DINOs’ rely on both incomes to make ends meet

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As many as 3.2 million working couples are ‘Double Income, No Option’ (DINOs), meaning they are reliant on both incomes to make ends meet, finds LV=.

At the same time, research from the Halifax suggests that the situation is even worse for those with children. Almost a fifth (18.5%) of an average parent’s salary is spent on each child in the household. Parents of 0-11-year-olds are spending an average of £448.41 a month or £5,380.92 per year.

According to the research, parents spend an average of £57 per month on childcare and a quarter (24%) have relatives help out with childcare. However, national statistics from the Family and Childcare Trust suggests these costs could be significantly higher for those who pay for childcare, at £364 per month.

Households are also coming under greater pressure, with around a quarter saying their household financial situation has got worse over the past two years, and also that their income isn’t stretching as far as it did this time last year, according to the LV= research.

For some, the loss of one income would necessitate minor lifestyle changes, including not going on holiday (52%) or more savvy shopping (47%), but for others it would have more serious consequences. Three in ten would need to apply for government benefits, while one in five would have to downsize their home, and one in seven would rely more on credit cards.

Worryingly, one in ten (11%) have never thought about how they’d cope if they or their partner lost their main source of income.

At the same time, those families with children can face significant unexpected one-off purchases. A third of parents had to shell out for additional furniture (32%), or a different car (29%),and almost a quarter (23%) said they had to buy a bigger house.

Relatively few households have income protection insurance in place. Three in five (59%) said that neither they nor their partner has income protection with 25% assuming it’s too expensive.

Chris McNab, head of life propositions at LV= said: “Millions of couples up and down the country need both incomes to pay the bills, with a significant proportion saying they’d have to make major changes if they had to rely on one income. Yet, the majority haven’t got any protection in place to support them if they found themselves in this situation. This is even more concerning in light of our recent report which found a large number of the population don’t have enough in savings to cope with a financial shock.

“With many people saying their household’s financial situation has got worse over the past two years, it’s even more important that people take the time to make sure they are prepared to withstand a personal financial shock. This is why we believe the government’s new Single Financial Guidance Body should have a specific focus on improving the financial resilience of UK households. 

The problem is particularly acute for Londoners, where the cost of raising a child to the age of 11 in London is double that of the rest of the country, costing on average £766.38 per month, or £9,196.56 per year. Outside London, the most expensive region is the South of England (£388.31 per month or £4,659.72 per year), and the least expensive region is Wales and the West of England (£388.31 per month or £4,659.72).

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