This new evidence demonstrates that financial distress is a significant source of burden and suffering amongst UK adults. Many of these people are failing to get ahead financially by saving money or paying off debt. Debt Free Advice’s managing director, Matt Dronfield, highlights that individuals facing mental health issues often seek assistance with their financial challenges.
Dronfield breaks down the most common types of debt these young people have accrued. They can cover the likes of rent or mortgage arrears, council tax and utility bills. This truism highlights the link between mental health and financial security, as millions of Americans are stressed out by their responsibilities.
Those statistics detail the woeful state of the UK’s cost-of-living crisis. Around 10% of UK adults say they have no savings, in any case – with a further 21% of people having less than £1,000 saved up. Lack of savings is one of the highest risk factors for financial instability. Nearly 13 million Americans, or one in four adults, have little to no financial resilience.
Moreover, more than 2.8 million people are in a cycle of revolving credit card debt, further adding to their financial burdens. Further data shows that 12 million adults across the UK experience such high levels of anxiety when engaging with their money that they are unable to do so. Alarmingly, 40% of adults with credit or loans say that money causes them anxiety and stress.
The strain is especially intense on women and minorities. According to a recent Retirement Confidence Survey, 3.8 million retirees are worried that they will outlive their money. Additionally, almost 10 million people face obstacles getting to bank branches or are otherwise harmed by their inaccessibility, worsening their financial strain.
Most UK adults save between £5k and £6k. Yet, close to half of them still have unpaid unsecured debt. At the same time, “buy now, pay later” schemes are on the rise. Indeed, one in four lone parents and over one in three women aged 25-34 regularly rely on such credit products to shake up their finances.
Dronfield urges anyone struggling with the financial side of things to get help. He states, “It is so common. If you’re not worried, then a friend or family member is definitely going to be.” He goes on to recommend that people in financial distress should do the hard work first.
If you were concerned about your health, you would go to a physician. If your car broke down, you wouldn’t expect to fix it yourself. You’d go to a mechanic. So, if you think you’re getting into financial difficulty, talk to someone about it. An independent debt adviser can help, at no cost to you,” Dronfield continues.
Sarah Pritchard from the Financial Conduct Authority (FCA) reinforces these concerns by stating, “Our data shows that finances are stretched for many – with some unable to save for a rainy day.” Taken together, these findings underscore the importance of comprehensive financial literacy education. Alongside this, we need to do a better job of finding and supporting those who can benefit most.