Compared to the government’s billions of debt each day, individual indebtedness is small. But many of us are on the brink of financial disaster.
Bright Grey's The Reality Gap Report explores people's perceptions of their monthly outgoings compared to what people are actually spending and have in personal assets. It says that as many as 12 million Brits are struggling to cope with their monthly bills.
The average Brit spends £1,378 each month on essentials - 68% of the average individual income. The average monthly spend rises to £2,001 for families. After rent or mortgage payments, transport (£267), monthly shop (£208) and council tax (£120) make up the largest share of monthly expenditure. Fuel bills have risen by 325% since 2003 and our shopping baskets are up 27% year on year.
With households already stretched even a modest increase in bills or decrease in income would cause people to struggle financially. More than half the population would find themselves in money trouble if their bills rose by just £100 a month - not a great deal in the grand scheme of things, particularly when you consider how low interest rates are at the moment and how they are expected to rise again.
Roger Edwards at Bright Grey comments: "The report reveals the average Brit is just £155 away from a money meltdown. The frightening truth is that many Brits are already struggling to afford their monthly bills - and all it would take is a small increase in bills or drop in income for people to find themselves in trouble."
Critical illness insurance: News update: 25/09/2009