One in five people in Wales have ‘no savings at all’ to weather cost of living crisis, research shows
One in five people in Wales have ‘no savings at all’ with which to weather the cost of living crisis, a new report has shown.
The data from the Yorkshire Building Society suggests that at 20% Wales has the second-highest percentage of people on the island of Great Britain with no savings, behind the North-East of England at 27%.
Cardiff also ranked second highest for major cities on the mainland where people had no savings at all, with 24% having no savings, just behind Newcastle at 27%.
The UK-wide average stood at 17%, the report drawn up alongside the Centre for Economics and Business Research showed.
Stephen White, interim chief executive of Yorkshire Building Society, said: “Families across the UK are already having to budget carefully in order to make ends meet.
“Some have accrued savings over the course of the pandemic, which can help foot monthly bills. Others simply do not have the financial resilience to withstand rising costs.
“Whatever people’s current financial situation, it is important they take action now in order to limit the damage the cost of living crisis could cause.
“Researching ways to cut costs and make the most of services available is paramount – even for those who may feel relatively resilient.”
‘Responsibility’
The report also suggested that households could be left around £100 per month short of what they need to cover their spending in just two years’ time on average, as costs rise faster than incomes.
The report estimates that, by 2024, average weekly incomes could increase to £680 by 2024 – while average weekly UK household spending may reach £705 as energy prices and other costs push up the prices of goods and services.
This projected gap adds up to a shortfall of around £100 per month.
A survey of 4,000 people was carried out alongside economic analysis from Cebr to examine the financial resilience of households.
The “inflation nation” report found that despite incomes remaining slightly higher than expenses in 2021 (at £596 versus £595, respectively), the rising cost of living has already forced nearly four in 10 (39%) people to dip into their savings in the past 12 months.
Nearly a quarter (23%) of these savers said they had dipped into their savings by between £200 and £499, while one in eight (12%) had taken out between £500 and £999.
Nearly a fifth (17%) had withdrawn more than £1,000.
Just over two-fifths (41%) of people surveyed expect their household outgoings to increase by between £101 and £500 each month over the next 12 months, with utilities, food and drink and fuel prices among the top concerns.
Nitesh Patel, strategic economist at Yorkshire Building Society said: “Costs are rising at a considerably higher rate than income, and will soon overtake income altogether. This level of inflation will see savings quickly depleted for those who have them if action is not taken.
“The concern is not only the here and now – but the knock-on effect of depleted savings for the future. Those planning to buy a home, for example, may have to wait considerably longer whilst they build up their savings again.
“Those who are less financially resilient are encouraged to seek help from organisations such as Citizens Advice so that they can navigate the coming months – and potentially years – without getting into debt, or, indeed, getting into further debt.
“Financial institutions, such as our own, have a responsibility to educate people as much as possible about the real impact this crisis can have and offer any guidance we can.”
More than two-thirds (67%) of those surveyed are worried about the impact the crisis will have on them and nearly half (46%) said it is already having a negative impact on their mental wellbeing.
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I wonder what amazing advice they can give to those already using foodbanks?..Cut down on what? Breathing? Being alive? Its time to start looking at all of the wealth and resources being hoarded by the rich people who created this mess that we are in now, who profit from it, whose power rests upon our poverty, and whose will is that the way things are is the way they shall forever remain, with children starving to death, mothers full of desperation, fathers full of fear, the youth with no future, the people without freedom, its time to start forcing them… Read more »
It’s a disgrace that so many people have no savings & that those who have should be made to forfeit them for big business like Shell & BP to continue to make £billions! A crime against the poorest in our society, least able to cope. Galling has Cymru didn’t vote for these Tory sharks! In fact, Cymru has NEVER voted Tory. Why are we being subjected to this intolerable larceny.
Not surprising is it when one considers the prevalence of low wage, unstable employment situation. Combine that with the escalation of cost of living and the accelerated inflation in fuel and energy costs and you get the devastating position where people who used to just break even ( by being very tight) or were marginally in debt are now staring at debt accumulating at an alarming rate. Chucking scraps in the general direction of these people is not a credible way of easing their conditions.
people should cut down on the luxuries. i know of a number of poor people who insist on living in houses when they could move their entire family into a room to save money. they insist on eating every day, wearing shoes, and not selling their children into prostitution. if i paid any tax i’d be appalled at my taxes going to feckless parents who don’t monetise their children.