One in ten Brits are unable to make ends meet and have to dip into their savings every month, new research has found.
As the cost of living continues to soar, a further 25% of adults have been forced to reduce the amount they are saving, or abandon saving altogether.
The findings, from credit reference agency Callcredit, highlight the dramatic impact that the credit crunch is having on UK finances.
Savings already limited
With so many people starting to dip into their savings, it is worrying that most households don’t have a large pot to start with.
In fact, four out of 10 working UK adults admit they could not survive more than one month on their savings alone, with that figure jumping to 53% among 25-34 year olds.
There has also been a sharp rise in the number of people spending more than half their salary on unsecured debt – up to 5% from 2% last September.
Nearing a financial tipping point?
"These findings are a stark illustration of how the credit crunch is already affecting consumers, and it's clear that the rising cost of everyday living is having an immediate impact on our ability to save,” says Callcredit Check head Owen Roberts.
“Many workers in the UK are at what could be described as a financial tipping point, where just one unexpected unfortunate incident could have dire financial consequences.”
The increasing pressure on finances was also highlighted in a separate report by a group of charities, which showed that an increasing number of middle income homes are seeking out debt advice agencies.
If you’re feeling the pinch, it’s important you act quickly to shore up your finances, as the cost of living is likely to go up before it comes down. Click here to view five tips that could shave £100s off your monthly budget.
