Nine in 10 households soon to be without enough money at end of the month, report warns
Only around one in 10 of households in the West Midlands will consider themselves comfortable financially in the coming year, a new report suggests.
Households’ financial resilience will be eroded as the cost-of-living squeeze tightens, according to economic modelling.
In a year’s time, the areas of Britain where fewest people have enough money left at the end of the month will include the West Midlands.
According to the Hargreaves Lansdown savings and resilience barometer, only 9.2 per cent of people in our region will have excess funds available. The situation is even worse in some other regions, including Yorkshire and the Humber at 6.7 per cent, the North East of England at seven per cent, Wales at 8.1 per cent and the East Midlands at 8.7 per cent.
The figures were released in a study produced with help from Oxford Economics. Researchers used official data for the modelling, including the Wealth and Assets Survey.
Over the next 12 months, the percentage of people with sufficient emergency savings will fall from 62 per cent to 57 per cent, it was predicted.
Having sufficient savings was defined as enough to cover at least three months of essential spending.
In the North East of England, the percentage with enough savings will fall to just 44 per cent, according to the research.
Sarah Coles, senior personal finance analyst at Hargreaves Lansdown said: “The regions where people started with less savings and less wiggle room in their budgets will face some impossible challenges.
“In the next 12 months, rising prices will mean huge falls in the proportion of people with enough cash left at the end of the month.
“Right now, across the country half of people have enough money left at the end of the month.
“In a year’s time, only London will see as many as one in five people in this position, and in most places it will be closer to one in 10.
“Those who do have some lockdown savings left may well spend their way through them.”
Cost-of-living payments will be made in coming months to help cushion rising living costs.
From Thursday, a first instalment of £326 will start to be paid out to low-income households on benefits.
The second payment of £324 will follow in the autumn.
Pensioner households will receive an extra £300 to help cover the rising cost of energy this winter, while people on disability benefits will receive an extra £150 payment in September.
From October, households generally will have a £400 grant to reduce energy bills.
