Legal & General’s latest South East Deadline to the Breadline Report reveals that within 41 days of losing their income, the average South East family will be reliant upon state benefits and friends and family alone for financial support, once their savings run out.
This ‘Deadline to the Breadline’ in the South East has decreased by 3 days since the last report – from 44 to 41 days. With over a third (35%) of the UK population not having any money put away, this could potentially see a significant number of people on the breadline tomorrow, in the event of an unexpected shock to their income.
With some experts expecting interest rates to rise by the end of 2015, the report found that a 2% increase in mortgage interest rates would move the typical household with a mortgage one day closer to the breadline. Even a 1% rise would mean households would no longer be able to save each month and would have to change their spending habits, or rely on existing savings, to make ends meet.
Other key findings:
· Average UK household is 29 days from the breadline – but just 14 days for those of working age (18-64 years old)
· Households in Greater London have the longest average deadline (83 days) due to an increase in median savings in the capital since our February 2014 report.
Average (median) household savings in Wales – the region with the shortest deadline – have decreased and now stand at just £238.
As you might expect, the over 65’s continue to lead the way when it comes to saving. This age group has a deadline of over one year (379 days)
Outright homeowners are in a much stronger financial position than other households, with an average deadline of 426 days, compared to 22 days for the average homeowner with a mortgage and just two days for households living in private rented accommodation.
Mark Holweger, Managing Director (Intermediated), Legal & General Assurance Society Limited comments:
“Our Deadline to the Breadline report exposes the harsh reality that many households in the South East are on the brink and just weeks away from becoming reliant upon family, friends or the state. Despite improvements in the employment market, the average family in the South East is just 41 days away from the breadline.”
Holweger continues:
“With new economic headwinds approaching and an interest rate rise on the horizon, now is not the time to be burying our heads in the sand. Talk of the economic recovery and an increase in consumer confidence could lead many people to revert back to their old habits when now really is the time to think about protecting their future.”