People forced to dip into savings to make it through to payday are withdrawing, on average, £118 a month, according to new research from Tesco Bank.
The findings come at a time when household and personal budgets are feeling the pinch as the cost of going about everyday life continues to increase. And many people are having to dip into savings to cover shortfalls. 68% of people with a budget aimed at keeping their spending on track have had to use savings to make it through to their next payday, with 10% doing so on a regular basis.
This pressure is being felt most acutely by people in their 20s and 30s, with 77% having to use savings to see themselves through to payday, withdrawing an average of £123 each month. Some £1,476 in the course of a year.
According to the research as many as three in five (60%) UK adults have either a weekly or monthly budget to keep spending on track, but this is becoming increasingly difficult to stick to as the cost of living rises. 45% of people with a budget admit to going over their limit and 31% have increased their budget in the last six months, with 66% saying this is due to the rising cost of living.
This leaves 40% of UK adults without a budget in place. Looking at the reasons behind this, 72% of people don’t think they need one for general day to day spending, 12% have never tried budgeting and 10% don’t have one because they don’t think they’ll be able to stick to it.
Gail Goldie, Director of Savings & Lending at Tesco Bank commented: “There is no shying away from it. Life is getting more expensive and it is putting pressure on incomes and the budgets that keep our spending on track. This is leaving many with no option but to dip into savings to make it through to the next payday and the dent can be significant.
“This increase in the cost of living shows little sign of slowing down and this is why, especially at the moment, people should ensure their money is working the hardest it possibly can. There are a number of budgeting tools available, like Tesco Bank’s new Clubcard Pay+ payment card, if you are one of the 40% of adults who don’t have a budget in place. These little changes can make a big impact and help stretch budgets that bit further.”
