March 2020’s Money Statistics, produced by The Money Charity, are released from a place significantly different to anything the majority of us will ever have witnessed before, and almost certainly unlike any previous period for which this report has existed.
Life has changed very quickly for the whole of the UK, leaving most of us disoriented and still scrambling to catch up with adjusted ways of life. The Money Statistics is no different, and thus this month’s release strikes a different tone to normal. A key point of uniqueness for the March report being that, with the majority of numbers which we regularly report on relating to the period up until January and February 2020, they are therefore unable to capture the massive changes to GDP, pay, employment, debt, and government spending that have rapidly taken place since then. However, it seems impossible to ignore this context, and therefore the March report can be best viewed as a snapshot of the UK on the eve of a crisis. Covid-19 (“Coronavirus”) will end up affecting many people in many ways but one of the most prominent areas will be in our finances.
As a country, we went into the current situation with £1.45 trillion in mortgage debt, up from £500 billion in 2000. For every adult in the UK there is an average of £4,264 in unsecured debt. The UK holds £72 billion in credit card debt, a significant proportion of which is deemed “persistent” by The FCA and in need of sustained reduction. In a crisis many will think first of their savings as a backup, however 12.8 million households either have no savings at all or less than £1,500, nowhere near enough for most people to support themselves through a sudden loss of income. 4.8 million people live without at least one essential household item (such as a fridge, freezer, cooker or washing machine) and now face a domestic lockdown which will only further exacerbate this.
In short, the big financial question for the UK, particularly all those involved in key decision making for society, will be: “did we build an economic framework that enabled people to be as resilient as possible to life’s unexpected events?” And, perhaps even more importantly, “what could we do better next time?”
Paul Frost, Interim Chief Executive of The Money Charity says:
“Firstly, and most importantly, I hope all our readers and their families, friends and colleagues are keeping safe and well during this challenging period. These are truly unprecedented times, but in many ways they illustrate the relevance of the things we speak up for every day. An essential part of our financial wellbeing and financial education work is our emphasis on the importance of people planning ahead, budgeting robustly, having a financial buffer if at all possible, and keeping debts to manageable sustainable levels, so they are in the best possible position to cope with both the expected and unexpected.
“As the UK’s statistics heading into the Covid-19 crisis amply demonstrate, these messages are
both difficult to bring to enough people’s attention and often hard for them to implement. This amplifies the pressing need for increasing the availability of effective financial wellbeing interventions to all sections of society, and in particular the vulnerable.”
Other striking numbers from the March Money Statistics:
- The number of people unemployed in the UK grew by 14 per day in the year to January 2020. (P20.)
- It costs an average of £22.92 per day for a couple to raise a child from birth to the age of 18. (P14.)
- The population of the UK grew by an estimated 1,083 people a day between 2017 and 2018. (P20.)
Get the full picture and many more fascinating facts about money in the UK in our monthly Money Statistics.
Notes to Editors
- The Money Charity is the UK’s financial capability charity. We believe that being on top of your money means you are more in control of your life, your finances and your debts, reducing stress and hardship, and that being on top of your money increases your wellbeing, helps you achieve your goals and live a happier more positive life as a result. Our vision is for everyone to be on top of their money as a part of everyday life. We empower people across the UK to build the skills, knowledge, attitudes and behaviours, to make the most of their money throughout their lives. Find out more at https://themoneycharity.org.uk/
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