Financial information services firm Markit has released its monthly Household Finance Index, which shows that British households are seeing their finances decline more rapidly now than when the recession was at its peak.
Markit surveys over 2,000 households each month, gathering data on things like spending, savings, debt, job security, availability of and requirement for credit, and perceptions of inflation.
The latest report indicates that the spending power of UK households has fallen for 3 consecutive months, and is now at its lowest ebb since the first survey was undertaken in February 2009. Between July and August this year, nearly 40% of households saw their finances deteriorate. Less than 6% said their financial situation had improved.
Just 9% of respondents said they had been able to increase their savings, and 34% said their savings had dropped. 22% said their levels of debt had risen, compared with 17% who reported a reduction in the amount of money they owed. 24% believe their property has dropped in value, whilst 7% think their house is worth more now. In this climate, 50% of people are less willing to make a major purchase now than in the past.
Tim Moore, senior economist at Markit, said: “With a global economic slowdown and an escalating eurozone debt crisis lapping on the shores, it was unsurprising to see households’ appetite for major purchases reverting to its lowest since the start of the year.” He added that take-home pay had dropped more sharply in August than in any of the previous 9 months, and said the increasing cost of living had compounded the fall in disposable incomes.
If you are experiencing a deterioration in the state of your finances, don’t let things get out of control. Get debt advice from one of our specialists today.