Research from investment, protection and retirement specialist LV= reveals how UK households are turning to debt to ease rising living costs.
The LV= Wealth and Wellbeing Research Programme* - a quarterly survey of 4,000 UK adults - shows that people of all ages are becoming increasingly dependent on credit cards and loans.
Parents of children aged under 18 consider themselves to be struggling the most with rising debts. The research reveals:
People aged 18-34 are more likely to have higher debts from student loans (25%), bank loans (15%) or car finance (13%). Alternatively, 16% said that they have borrowed money from family or friends, while 7% have either a debt management plan or an Individual Voluntary Arrangement (IVA) to consolidate and pay off their debts.
UK adults aged 35-54, are more likely to face increasing financial pressures such as parenthood, mortgage costs and ageing parents to support. 59% said they were struggling or failing to afford day-to-day bills, with 7% missing payments on utility bills within the last three months.
Despite two-thirds (67%) of retirees stating that they could comfortably afford day-to-day costs, 41% said that they would struggle to pay an unexpected cost of £500. A third (33%) hold non-mortgage related debt such as credit cards and loans in retirement, which can be worrying for those living on a fixed income.
“Our research highlights the real impact of the current economic environment showing that when finances are stretched, many people will turn to credit cards, loans or family assistance.
“As levels of debt increase, it is important to try and not neglect future finances either. About 20% of working people have reduced or stopped their pension contributions in the last quarter alone to help households with everyday bills. Cutting back on savings and pensions to cover costs now, could affect people’s chances of achieving a more secure retirement in the future.”
LV= is one of the leading life and pensions mutual insurers, serving over 1 million members and customers across the UK. As an investment, protection and retirement specialist, LV= offers a range of products, services and advice to help members and customers protect their income while they’re working and maximise it when they stop.
LV= and Liverpool Victoria are registered trademarks of Liverpool Victoria Financial Services Limited (LVFS) and trading styles of the LV= Group of Companies. Liverpool Victoria Financial Services Limited, registered in England with registration number 12383237 is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority, register number 110035. Registered address: County Gates, Bournemouth, BH1 2NF.