Yorkshire and Humber adults faced with a gap in their personal finances are most likely to plug it by cutting their spending, according to new research by R3, the insolvency trade body.
R3/ComRes’ regular survey of 2,000+ British adults’ found that 63% in Yorkshire would resort to spending less if they experienced an interruption to their regular finances, even higher than the 58% across the UK. In the region 50% would use personal savings (51% nationally).
Adrian Berry, chair of R3 in Yorkshire and restructuring partner at Deloitte LLP says: “It’s all too easy for people to get into serious financial trouble as a result of an unanticipated blip in their personal finances. For those trying to plug a gap, spending less is one way to avoid storing up problems for the future. A considerable portion of British adults already struggle to payday so any interruption to income can be critical.”
The survey found that 44% of adults in Yorkshire often or sometimes struggle to make it to payday, compared with 39% across the UK.
The research also shows that British adults aged 65+ (68%) are twice as likely to use personal savings as those aged 35-44 (34%).
On the other hand, 29% of British adults would ask family and friends for a loan or gift, rising to 46% among 18-24 year olds.
Mr Berry continues: “Using personal savings is also a healthy way of plugging a gap, but it’s not an option available to everyone. According to the survey, family and friends are a safety-net for many people. Unsurprisingly, younger people are most likely to turn to their inner circle for assistance, suggesting that the ‘bank of mum and dad’ is still very much alive and open for business.”
R3’s research suggests that 2.86m British adults have borrowed over £100 from family or friends in the last month.
The survey also found that, to fill the gap in their finances, 4% of Yorkshire adults say they would not pay other debts, and 3% would apply for a payday loan if they were to experience a gap in their finances.
Mr Berry adds: “Falling behind on other bills or relying on payday loans are short-term solutions which in-turn can make the gap all the bigger.
“Although based on a small number of people, those who are extremely worried about their level of personal debt, are more likely than those who are very, fairly or not at all worried, to say they would plug a gap in their finances by applying for a payday loan. It’s too easy for financially vulnerable people to get caught in debt traps where one debt sparks another and a dangerous cycle emerges which is difficult to break without help.”