The latest European Consumer Payment Report from European credit management firm Intrum presents a worrying picture when it comes to rising indebtedness and the ability of consumers to meet their financial obligations.
Over 1,000 UK consumers took part in the survey of more than 24,000 Europeans. While more and more people are able to save money every month, the number needing to borrow to pay bills or buy things for their children is also growing.
In total 29% of UK respondents say they have maxed out their credit card or borrowed money in order to pay a bill or bills, apart from mortgages, during the past six months. That’s up from 18% last year. This is the highest share of respondents among all European countries, where the average was 20%, putting the UK on par only with Greece.
The amount of people saving every month in the UK has risen to 59% from 49% a year ago. On average they are saving £241 a month, up from £95. Despite this significant increase, 27% of UK respondents have said they do not have their financial situation under control, the highest share of respondents reporting this across Europe, for which the average is 18%.
Technology and online payments appear to be influencing consumers. More than one in three (37%) agree that the ease of shopping online makes them shop more in total. And more than half (57%) say the ease of access to credit via smartphones worries them.
The results also show that more than half of the consumers surveyed for the report (51%) wish they had learned more about household finances in school, and 7 in 10 believe schools should teach children more about how to manage money.
Eddie Nott, UK Managing Director of Intrum said “Credit is an important part of society and it is natural that both businesses and consumers take on more credit when the economy grows.”
“But the system in which credit is granted needs to work in favour of all parties involved. Our daily experience and findings in this survey show that the financial sector can do more to support sound choices, for example through financial education initiatives.” A
The report analysed the answers of 24 398 respondents, between the ages of 18-65 in 24 European countries, were collected in total, including 1,013 in the UK. The survey featured questions concerning household finances and was conducted during September 2018.
Key findings from the report:
- As the economy recovers, savings have gone up – but so has indebtedness. A growing number of people are struggling: almost a third need to borrow in order to pay bills.
- Parents struggle the most. Nearly half of those (44%) with children under 18 have recently needed to borrow to pay bills.
- As many as 44% of all parents in the UK have recently borrowed money in order to buy something for their children – an increase from 30% last year.