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Daily Insurance Industry News
Monday 22nd of January 2018
January 25, 2012

Aviva: families struggling to keep up

by Gill Montia

Story link: Aviva: families struggling to keep up

Aviva: families struggling to keep up

Families in the UK are struggling to build up their savings as the impact of inflation puts pressure on incomes and debt levels.

So says Aviva in its latest Family Finances Report, which puts typical monthly net income for families at £2,066, an increase of 7% in the last year.

However, not all family groups have been so fortunate, with divorced/separated/widowed parents having seen their average monthly income tumble 22%, from £1,387 (January 2011) to £1,075 (January 2012).

The most common source for family income remains the salary from a primary earner at 69%, but the proportion is down from a high or 72% in August 2011, suggesting that unemployment among families is on the increase.

Meanwhile, the typical family debt (excluding mortgages) has increased by 48% from £5,360 (January 2011) to £7,944 (January 2012).

To add to the gloom, the typical amount saved on a monthly basis is down from £22 (January 2011) to £21 (January 2012), having peaked at £34 in August 2011.

Forty-two per cent of families are now saving nothing on a monthly basis.

However, the findings suggest that average monthly family expenditure has remained steady over the past 12 months.

Housing remains the single largest monthly expense for UK families at 20% of typical monthly income, followed by food (10%) and debt repayment (9%).

The percentage of monthly income spent on food has remained steady but families are cutting back on their non-essential spending.

A fifth of families surveyed claim they are not spending money on personal goods, while 30% say that they do not spend on entertainment/recreation/holidays, and 42% spend nothing on leisure goods.

Over the next six months, UK families are primarily concerned about the rising cost of living (62%), the threat of redundancy (46%) and meeting the cost of unexpected expenses (41%).

Commenting on the findings, Aviva’s head of protection sales and marketing, Louise Colley, says: “Families are struggling to keep up. Many appear to have acclimatised to this economic environment by shopping around and seeking to minimise their spending in certain areas.”

Aviva’s research is based on responses from over 10,000 people who are members of one of six types of families identified by the insurer.

 

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