You are here: Home - Household Bills - News -

One in five left with less than £100 disposable income each month

Written by: Paloma Kubiak
While some Brits are preparing for an uncertain combination of a Bank Base rate and the effects of Brexit, others are already feeling the pinch.

Many UK consumers are “chronically underprepared” for additional costs associated with a possible rate rise before year end and the uncertainties surrounding the Brexit outcome, according to a report.

The Base Rate, Brexit and Bills report from Nationwide Current Accounts looked at the financial realities facing UK consumers, such as rising inflation, slow wage growth and credit reliance.

Almost half (44%) of Brits agree there will be financial consequences as a result of Brexit, anticipating increases on the price of food (56%), holidays (49%), utilities (42%) and fuel (38%).  One in ten (11%) are already cutting back and 10% are saving in anticipation of a Brexit impact and twice as many ‘Remain’ voters have reduced spending than their ‘Leave’ counterparts (16% vs 8%).

Others are putting off borrowing money (6%), buying a home (5%), a new car (5%), or even moving jobs (5%) as a direct result of Brexit concerns.

For mortgage holders, Nationwide found that the average household spends 24% of their income servicing the debt while one in 10 spend 50%.

After paying for housing and bills, one in five are left with less than £100 of disposable income each month. While 62% said they could cope with a rate rise, 8% would need to consider taking drastic changes. The report found 9% would need to cut spending elsewhere in order to make ends meet while 11% said they have already cut back spending on food.

As such, 43% said they couldn’t cut back any further on their food shop and would therefore look for more deals and reduced items to cope. 28% use their credit card for everyday expenses while 16% rely on their overdraft. One in 10 have had to turn to family to help them out and 2% have pawned their possessions to raise some cash.

Nevertheless, Brits are increasingly savvy with their spending, as 51% shop around for their car insurance at renewal and two in five haggle over the cost of TV and phone service while more than a third (38%) regularly switch energy providers. One in seven (14%) have also used the low base rate period to overpay their mortgage to clear their debt sooner, while 4% have made additional contributions to their pension.

Dan Wass, Nationwide’s director of banking and insurance, said: “We’re facing uncertain economic times, so it’s interesting to see what consumers make of it all and how this is already influencing their thinking about day-to-day finances. While we don’t know what the effects of Brexit will be or indeed when the Bank base rate will rise, now is the time to take action – ensuring you have the best products and services to meet your needs.”

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

The savings accounts paying the most interest

It’s time to get your finances in shape, and moving your cash savings to a higher paying deal is a good plac...

Everything you need to know about being furloughed

Few people had heard of ‘furlough’ before March 2020, but the coronavirus pandemic thrust the idea of bein...

The experts’ guide to sorting out your personal finances in 2021

From opting to ‘low spend’ months to imposing your own ‘cooling-off period’, industry experts reveal t...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week