UK workers living 'hand to mouth'
Beckett Frith, March 06, 2017
One in five (22%) adults believe they'd fall behind on key bills within a month if they lost their main income source
Many British workers would struggle to cope with any disruption to their wages, according to new CIPD research.
The resaerch found that one in five (22%) believe they would fall behind on key bills within a month if they lost their main source of income, and just 15% say their wages allow them to live comfortably.
Almost half say they are ‘just about managing’ (30%) or finding things 'difficult' or 'very difficult' financially (18%).
Pensions was found to be an area workers were keen to make short-term savings on at the expense of financial security in later life. One in four (27%) are not currently saving for retirement, but nearly half (49%) don't feel confident they will have enough money to live on when they retire.
CIPD acting chief economist Ian Brinkley said he was not surprised by these results.
“The fall in the value of the pound following the vote to leave the EU has pushed inflation up, with further increases expected in 2017, meaning many workers could see a squeeze on the value of their wage packets over the year ahead," he said. "This is concerning given our research shows that there is little room for manoeuvre when it comes to many people’s personal finances.
“It is clear that many people in the UK are living hand to mouth and that a loss of income or unexpected bill would present a serious financial challenge for them. It is therefore unsurprising that so many people are not saving for retirement, with the daily pressures of financial life making it difficult to save for the future."
Among those who identify as ‘just about managing’ financially, three in five (60%) would struggle to pay an unexpected £500 bill, while more than three-quarters (79%) would fall behind on key living expenses within three months if they lost their main source of income.
Brinkley said he hopes the chancellor will address this issue in his Budget on Wednesday. “The government has made improving living standards through better productivity a central aim of its new industrial strategy," he said. "At the heart of that strategy has to be investment in skills so struggling households can get better wages in the future.
“The chancellor has a distinct challenge to deliver a Budget that helps alleviate the daily pressures of those who are ‘just about managing’ while at the same time ensuring that we are prepared for the potential choppy waters ahead."