20/04/2020

Our latest Wealth & Protection Survey 2017 shows more than half of British workers self-identify as barely scraping by, with 12% saying their finances are ‘hanging by a thread’.

Tom Conner
Director at Drewberry

38% of working Britons say they’re ‘just about managing’ financially, while 14% describe their finances as ‘hanging by a thread’ (or worse)!
More than 1 in 4 Brits (26%) have £100 or less left each month after paying for basic living expenses, while 44% have £200 a month or less.
39% of Britons have £1,000 or less in cash savings while 42% have over £1,000 in debt.
Over 1 in 4 Britons (26%) has more than £5,000 in non-mortgage debt.
Over 50% of Britons don’t know how much their pension is worth. Of those that do, 44% report current pension savings of under £10,000 while 47% of 50-sometings report having less than £50,000 in their pension pot.
Not so great expectations: 53% of today’s millennials expect to be worse off than their parents in retirement.
15% of Britons don’t expect to be able to afford to retire before they reach their 70s, while almost 13% don’t believe they’ll ever afford to retire.

Few Brits Have Income Protection or Savings if Unable to Work

Our findings provide a startling snapshot of what life’s currently like for the average British worker. More than half are feeling the squeeze, with over 50% of the country reporting that they’re ‘just about managing’ or worse. Only 15% describe themselves as ‘comfortable’ with enough left over each month to contribute to pensions and savings plans.

Egle Blusiute
Independent Protection Expert at Drewberry

How Much Does the UK Have in Cash Savings?

Cash savings are pitifully thin on the ground. Over a quarter of working Britons [28%] have less than £500 in cash savings, and almost 2 in every 5 Brits (39%) have less than £1,000.

Based on our findings, we estimate that only around 1 in 3 working Britons currently has a sufficient cash buffer to last three months or more if they were suddenly unable to work or they lost their job.

With such a small financial buffer between them and serious financial peril, it’s clear that many Brits could benefit significantly from Income Protection Insurance, which is designed to kick in should accident or sickness prevent you from working.

Despite this, another issue our survey unearthed was that only around 6% of Britons have insured against the risk of losing their income, which means that a great many UK households are exposed to the risk of an accident or sudden ill-health derailing their finances.

Unfortunately, income protection remains one of the least utilised insurances, despite the fact that it’s arguably the most important type of cover for most working Britons.

Critical Illness Cover was hardly better represented, being held by just over 1 in 10 Brits. The low take-up of these protection products is especially concerning given that 44.9% of workers had a mortgage to worry about if they couldn’t work.

Robert Harvey
Independent Protection Expert at Drewberry

Which of These Financial Products Do You Have?

Worryingly, around four times as many people had insured their pets than insured their incomes!

Household Budget Squeeze Means Discretionary Income for Brits is Low

We’re locked in a low-wage economy where the average working Briton has long since abandoned any financial ambitions greater than paying their bills and maybe squeezing a holiday or two from their annual budget. This is a long way from what you might expect from one of the richest countries in the world.

Sophie Wilson
Independent Protection Expert at Drewberry

“If anything, our findings suggest that many working Britons have become so used to austerity that they just don’t realise how badly off they are,” continues Sophie.

Despite real household income continuing to fall and personal borrowing continuing to rise, almost half of working Britons [48%] still think their finances are in good shape.

How Much Do You Have Left to Spend at the End of the Month?

Our survey shows that more than a quarter of people have less than £100 a month left after paying their bills and 44.3% had £200 or left less to play with by the time the end of the month rolled around. Given this, it’s troubling to note that only about 1 in 7 Britons regard their finances as being in trouble!

The reality is that saving into ISAs and pensions has become a luxury. Even to the minority that understand these products. Sadly, working Britons are being forced to subsidise the here and now with what they should be putting away for retirement or just for a rainy day.

How Much Debt Does the UK Have?

As well as having little left at the end of the month, Brits are also borrowing freely on credit cards and loans to make ends meet.

“Personal debt levels remain high, with over a quarter of us owing over £5,000 in non-mortgage debt,” explains Tom Conner.

“The impact of student debt means that younger Britons have by far the greatest debt burden. We found that 34% of 20-somethings owe over £10,000, compared to just 14% of 40-somethings,” he says.

The big concern here is that with discretionary income [what’s left after you’ve paid your taxes and basic living costs] is so tight, a great many Britons will be in the firing line if inflation continues at its current rate or if interest rates start to rise – both of which look likely.

“Ironically, working Britons helped to create these conditions when they voted to leave the EU last year, but with belts already so tight, a great many will struggle in the event of a hard ‘Brexit’,” ends Conner.

See the full data from the annual Drewberry Wealth & Protection Survey here →