New insight from short term credit provider Sunny reveals over a quarter
(28%) of UK adults have struggled to meet a bill or financial
obligation in the past 18 months, highlighting the tension between
people’s income and outgoings, with the average debt amount they
struggle with being just £240.
The research revealed that more women than men have struggled to meet a bill or financial obligation, such as a mortgage payment or utilities bill, in the last 18 months (30% vs 25%), but on average men owe more than women (£265 vs £220). When asked what bill or financial obligation they had struggled to pay, a tenth (10%) of respondents said their credit card bill. This was followed by rent or mortgage payments (9%), electricity bills (8%) and water bills (7%).
When it came to paying the outstanding bill, only a fifth (20%) approached their provider to negotiate an extension or repayment plan. 24% said they cut back in other areas to meet the payment, while 18% dipped into their savings in order to pay the bill. Nearly a tenth (8%) have yet to settle the outstanding bill.
Tales of the unexpected
If faced with an unexpected bill of between £100 and £1000, only half of respondents (49%) said they would easily be able to pay it off as they have that amount in accessible savings.
Nearly a quarter (23%) felt they would be able to pay it off but with some difficulty, as they only have some of the amount in savings and would need help with the rest of the sum, while further fifth (20%) said they have none of the amount in savings and would struggle to pay the unexpected bill.
Of those that said they had none of the amount in savings, women are more likely to struggle than men with an unexpected bill, with a quarter of women (24%) saying they do not have the savings compared to 17% of men.
To budget or not to budget
Nearly eight in ten (79%) of UK adults say they budget their monthly outgoings, with 41% keeping close track of their outgoings and 38% saying they always have an idea of how much they have spent.
Interestingly, those in full or part time work that struggled to meet a financial bill or obligation are more likely to plan their finances than those that are not in full or part time work, with 83% saying that they budgeted their spending. With the average individual weekly earnings in the UK currently at £463, the high line balancing act between income and budgeted outgoings that consumers walk means an unexpected bill or small misstep is enough to throw them off balance.
Credit where credit is due
When asked about their attitudes to credit, nearly half (48%) of UK adults believe there is good credit and there is bad credit. Over a tenth (12%) thinks all credit is bad and a fifth (21%) said they only use credit in a crisis. Furthermore, over half (52%) consider themselves to have a good understanding of the impact of outstanding credit on their credit score, while only 12% would say they have a poor understanding.
John-Paul Savant, CEO of Sunny, commented: “The financial balance that must be struck between income and outgoings for most people means that they simply don’t have any margin for error. This means an unexpected bill or a small budgeting misstep could have significant consequences. We know from our research that there can be a long term cost to a short term default and it is important that consumers can access flexible credit to help them bridge the gap when it is urgently needed.
“The Sunny loan is designed to give people the financial flexibility they need. Our customers can set a repayment plan that works for them and we even offer them five days to change their mind once they borrow from us. They also can pay back early at any time to save on interest with no fees or extra cost. If a customer is struggling to meet a repayment, we will work with them on a new repayment plan.”
(Source - Sunny Press Release)