New research has revealed 46% of the UK population is now unable to save anything from monthly incomes…
This is compared to 34% just two years ago (2005)². The recent interest rate rise is likely to see the number of people saving regularly decrease even further as people’s monthly mortgage repayments increase. Someone with a £100,000 mortgage who is coming off a two year fixed rate deal in the next few months will face an increase of around £100 in their monthly repayments.3
Richard Watters, managing director of A Quick Sale is warning that this trend could lead to an increase in home repossessions, as fewer and fewer people have money put aside to fall back on should they lose their jobs or experience a change in personal circumstances.
Richard said: “Our research has found that only one in ten people (12%) have enough savings to cover mortgage payments and living expenses should they lose their jobs, while only 13% have a mortgage protection policy that will meet their monthly payments. People who have savings seem to be having to draw on them to keep up with the cost of living and are cutting back on what they deem to be the non-essentials such as mortgage protection policies.”
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Credit card nationOf the lucky few that can afford to save, nearly a quarter (23%) are concerned that they aren’t able to save enough to manage should an emergency or an unexpected big expense arise. In comparison to this, nearly a fifth (19%) do not worry about saving as any large costs will be put straight on to a credit card.
Richard continued: “An increasing number of people (19%) are relying on credit cards and loans to meet unexpected costs that arise, which means that debt is also increasing. Recent figures have shown British personal debt has reached an all time high of £1.38 trillion4 - twice the level of Continental Europe.
“Back in February the Royal Institute of Chartered Surveyors was predicting that over 50 families will lose their homes every day in the UK during 2007 because they can no longer maintain their debt repayments. Increasing mortgage payments, fewer savings and rising debt is unfortunately a recipe for this to increase even further and our research has shown that repossession is a major concern for around 7.8million people.
Seek professional advice
Mr Watters added: “Our advice to people in this situation is to seek professional advice sooner rather than later as this will help them avoid getting to the stage where they are missing mortgage payments. For many people on the verge of arrears, re-assessing finances and looking at monthly outgoings can help to get them back on track.”
“At A Quick Sale we operate to very high ethical standards. We would like to see this approach adopted across the industry and, as such, are campaigning for regulation to be introduced to ensure that customers, who are often already in financial difficulty, aren’t exploited by any unethical practices, which may leave them in an even worse situation.”
