Many people are having difficulty managing their own money. Even if you aren’t in a difficult financial circumstance, chances are you know someone who is struggling to pay their bills, improve their income, and get ahead.
The gap between people who are financially comfortable and those who are struggling often depends on these factors: planning ahead, being resourceful, and being literate.
Let’s take a look at some alarming financial facts in today’s world.
Personal Finance Statistics
#1: College Savings Accounts Are Used by Only 2.5% Of Households
This means that a great majority of people are missing out on the advantages of 529 plans. This frequently puts students in difficult financial situations when it comes to paying for college and other forms of education.
Unfortunately, this means that parents are squandering hundreds, if not millions, of dollars in benefits by failing to take advantage of these arrangements.
#2: 95% Of Millennials Are Not Saving Enough
This may not seem substantial in your early years of saving, especially if you are in your twenties. But don’t be fooled by that for a second.
Your present savings rate has a direct bearing on your financial success, particularly your expected retirement age.
#3: 66% Of Millennials Have No Retirement Savings
The majority of millennials, unfortunately, are living paycheck to paycheck. It may appear unattainable to begin investing when they are unable to meet their basic needs and make their debt payments.
However, you can never be too prepared when it comes to retirement planning, saving, and investing. The sooner you begin and the more money you save each month, the better off you will be.
#4: Benefit Fraud in UK Is 4.6%
Housing benefit is the most common sort of fraud in the UK, with a rate of 4.6% and a total value of £1020 million which is considerably more than any other sort of fraud.
#5: 44% Anticipate a Boost in Their Finances This Year
Younger millennials are the most hopeful about their financial future, with a narrow majority (53 %) expecting it to improve.
Those aged 66 and up are on the other end of the range. Only 28% of them predict an increase in their personal fortunes.
#6: 11.5 Million Millennials Have Less Than £100 in Savings
Moreover half of the adult population in five regions of the country has savings that are less than that amount.
Those areas are Northern Ireland, the West Midlands, Yorkshire and Humber, North East England and Wales.
#7: Half of All Homeowners With a Mortgage Have at Least 50% Equity in Their Property
The equity holdings of UK borrowers (as a percentage of the current property value) are often good.
After nearly nine years of unbroken price growth, half of all mortgaged homeowners have at least 50% equity in their property, with the other third having between 25% and 50%.
#8: In January 2021, There Were 196 Million Credit Card Transactions
Credit card transaction volumes had declined by 31% (-88 million) from January 2020 by January 2021. At the end of April 2020, credit card transaction volumes reached an all-time low.
The national lockdown, which went into effect on March 16, 2020, could explain this.
#9: The Average Credit Card Balance Has Dropped
The money you’ve borrowed but haven’t paid back is your outstanding balance. The average outstanding credit card balance and the number of accounts with outstanding balances both declined gradually between January 2020 and January 2021.
The average outstanding credit card amount was £1,829 in January 2020, while there were 38.7 million accounts with no balance during the same time period.
#10: Millennials Are Financially Illiterate In 76% Of Cases
It’s a simple argument to make that poor financial habits and decisions are caused by a lack of financial literacy.
Many of us fail to devote the time and effort necessary to improve our financial literacy while spending hours on other topics.
#11: Household Bill Spending Increased by Only 0.4%
The average UK household spends £588 per week (£2,548 per month) on living expenditures like housing, food, clothes and transportation to and from work or school.
In 2020, household bill spending grew by only 0.4% compared to 2019.
#12: Outstanding Balances Incurring Interest Decreased by 19%
The total outstanding sum subject to interest fell by 19% from January 2020 to January 2021, from £37.6 billion to £30.5 billion.
#13: 38% Of Households Have Revolving Credit Card Debt
Revolving debt is not only bad for your finances, but it can also be emotionally draining.
Unfortunately, credit card debt is becoming the new normal for the bulk of people. Many families aren’t making the best use of their credit cards.
#14: The Average UK Household Spends 35-45% on Housing
Total costs for a normal roof over your head, whether you rent or have a mortgage, normally consume roughly 35-45% of an average UK household’s spending.
While rent or mortgage interest is the main component of housing expenditures, utilities such as internet, TV, and phones are a close second.
#15: As of January 2021, There Were 62.8 Million Credit Cards Issued to UK Residents
Residents in the UK were issued 62.8 million credit cards in January 2021. People are 47% more likely to own a debit card than a credit card, based on the 92.2 million debit cards issued at the same time.
Between January 2020 and January 2021, there was a 3% reduction (-1.9 million) in the number of credit card accounts open.
#16: Food & Beverages Make for 19% Of Total Annual Spending
Food is the third most expensive category in a household’s budget. In the UK, the average household spends £3,312 per year on food and non-alcoholic beverages.
The cost of eating and drinking out adds another £2,132 to the household budget.
Food and drink account for 19% of the total annual spending and food prices have been rising at a rate of roughly 2% each year.
#17: The Percentage of Accounts Accruing Interest Increased by 4.45%
The percentage of interest-bearing accounts climbed from 53.9% to 56.3%. As a result, more accounts are entering into debt, but the total amount of debt has decreased.
Balances that are not paid off at the end of the month are categorised as the total outstanding balance accruing interest. In 2020, the average credit card interest rate was 18.1%.
#18: 35% Of People Say That Their Emergency Savings Has Lessened Since the Pandemic
The pandemic and its economic consequences have served as a sharp reminder of the significance of saving for an emergency fund in order to maintain financial health when the unexpected occurs.
Only 16% of poll respondents stated they were highly confident in their emergency fund, while 35% mentioned they didn’t have enough money in case of an emergency.
#19: In Terms of Mortgage Debt by Region, London Occupies the Top Spot
Although London leads the way in terms of the mortgage debt by region, the East Midlands particularly shines out.
Mortgage debt increased from 134,035,054,407 in 2013 to about £500 million in 2014, a rise of more than 3.5%, though it fell sharply in 2015 and has remained stable since then.
#20: Pay Including Bonuses Rose by 4.7%
Regular salary climbed by 4.1% in the three months leading up to December 2020, compared to the same period the previous year. The total compensation, including bonuses, increased by 4.7%.
The rising averages are attributable in part to the pandemic’s fall in the number of lower-paying occupations.
#21: The Average Interest Rate on Credit Card Lending Bearing Interest Was 20.97% In January 2021
In January 2021, the average interest rate on interest-bearing credit card loans was 20.97%. This was 20.87% more than the Bank of England’s 0.1% base rate.
According to UK Finance Statistics from October 2020, 54.4% of credit card balances were accruing interest.
#22: 9 Million People Are In ‘Serious’ Debt Across the UK
The problem is particularly bad in five English cities, where more than 40% of the population is unable to pay their debts.
It further stated that very few people were attempting to seek expert assistance. It was shown that 74% of people who were in debt were “unhappy.”
Financial Planning and Budgeting Statistics
#23: 72% Of Households Lack a Written Financial Plan
This means that only 28% of households have a proper financial plan in place to assist them to manage their money.
#24: After Just One Year, 83% of People Who Make Financial Objectives Are Happier With Their Finances
It might be difficult to stay motivated when it comes to money management. It’s a difficult undertaking, but gaining confidence, motivation, and a greater understanding of your financial condition can have a good compounding effect.
Feeling better about your circumstances is one of the immediate benefits of forming and maintaining a financial plan through goal setting.
#25: 69% of Households Had Insufficient Emergency Funds
This figure reflects the seriousness of the current status of personal finance.
#26: 58% Feel Comfortable Creating a Personal Budget
It’s not impossible to create a budget. In 2020, two-fifths of people will have created a monthly personal budget.
To round off the budgeting and savings discussion, it’s worth noting that those who don’t have a budget are less likely to save than those who keep to a predetermined cash spending plan.
#27: 70% Believe They Need to Improve Their Financial Planning
Having a solid financial strategy in place now will benefit you greatly in the future. It’s critical to try to save more money. According to statistics on the cost of living, it’s becoming increasingly hard to save money.
#28: Only 30% of People Have a Long-Term Financial Plan
Only around one out of every three people actually uses a home budget plan. Because we have so many expenses these days, it’s critical to create a budget.
Only 30% of people have a long-term financial strategy that includes thinking about future savings and investments.
#29: 32% Saved Nothing for Retirement
According to a poll, 23% of people don’t have any kind of retirement plan. Half of all retirees have less than enough money set up for their golden years.
This is far from adequate for the future.
#30: 43% Of Student Borrowers Are Behind on Their Payments
New graduates, as well as those who graduated years ago, are having difficulty repaying their student loans. It’s no surprise, given that the majority of people are living paycheck to paycheck.
Because of their indebtedness, the majority of households are unable to properly prepare for their retirement or develop a sufficient emergency fund.
#31: Many People in the UK Claim to Use Budgeting Tools
Budgeting spreadsheet templates and tools can help you stay organised and on track with your finances. Many systems also allow you to connect your bank account and credit card to a budget, making this chore much easier.
#32: 84% Of Millennials Are Uninsured
It implies they are not adequately protecting their financial stability and the future of their families. Insurance, particularly life insurance, can be regarded as the financial family’s black sheep.
It’s, nevertheless, one of the most important aspects of your strategy.
Effects of COVID-19 on Finance
#33: Since the COVID-19 Outbreak, Nearly 50% of Millennials Had Missed One or More Rent/Mortgage Payments
Furthermore, 25% of those who responded to the study said they had missed more than one payment. As financial figures demonstrate, the younger generations were the hardest hit.
Debt accumulates as a result of missed payments.
#34: Following the Temporary Easing of COVID-19 Limitations, the UK Economy Increased by 1.2%
In December 2020, the UK economy rose by 1.2% as a result of the temporary easing of Covid-19 limitations. According to the latest projections from the ONS, the GDP declined by 9.9% in the calendar year 2020 as a result of the lockdowns.
#35: 5.1% Of People Were Classified as Unemployed From October-December 2020
From October to December 2020, 1.74 million persons were classified as unemployed (5.1% of the workforce), up 121,000 from the previous quarter (1,315 a day) and 454,000 from the previous year (1,240 per day).
#36: Coronavirus Affected 63% Of Person’s Personal Finances
Given the circumstances, this figure may not be surprising. Despite this, a sizable portion of the population is suffering from the pandemic’s devastating effects.
#37: The Number of Contactless Payments in the UK Climbed to 19%
The percentage of contactless payments made in the UK increased to 19% this year and is predicted to reach 31% by 2028.
Cash payments had a higher total payment volume of 10,980 million in 2018.
Contactless payments had a total payment volume of 6326 million.
#38: 43% Indicated They Would Have to Postpone Their Retirement Due to the Pandemic
As a result, up to 13.5 million Brits will be obliged to work longer than intended to compensate for the financial effects of COVID-19.
#39: Household Consumption Is Currently Down to 12.8% From Pre-Epidemic Levels
Household consumption, unsurprisingly, was a major drag on the economy at the start of the year, falling over 4% in the first quarter after declining 1.7% in the final three months of 2020.
Household consumption is now 12.8% lower than it was before the outbreak.
#40: 30% Of the Population Say Their Income Has Decreased Due to the Coronavirus
Surprisingly, 12% of poll respondents stated their income had increased. Those who said their wages had grown are putting the extra money into emergency savings accounts.
Day to day living isn’t cheap in the UK but you can still live a great lifestyle & save money if you learn from the statistics that we’ve shared with you. Building financial security takes time so the sooner you start the sooner you’ll get there and the better you’ll feel.
From financial budgeting and investing to savings, rent and mortgage, we hope there was something in here that motivated you to start earning and saving more.