Hargreaves Lansdown, the financial services company, issued a press release yesterday saying this:
Where the cost-of-living crisis is hitting hardest
- Right now, across the UK, only half of people have enough money left at the end of the month. In 12 months' time, in most areas this will fall to around one in ten.
- Every single part of the country will see at least a 30 percentage point drop.
- In a year's time, the areas where fewest people have enough money left at the end of the month will be Yorkshire and the Humber (6.7%), the North East (7%), Wales (8.1%), the East Midlands (8.7%) and the West Midlands (9.2%).
- Over the next 12 months, the percentage of people with enough emergency savings will drop from 62% to 57%.
- In the North East, the percentage with enough savings will fall more than anywhere else to the lowest level in the country (down 7 percentage points to 44%).
Figures from the HL Savings & Resilience Barometer, produced with Oxford Economics and released in July 2022.
I am not sure Hargreaves Lansdown has much to gain directly from this research: I am presuming it was undertaken in good faith and that the findings are realistic. I have no reason to think otherwise.
Now say we are not facing a cost-of-living crisis.
And note that even the Labour Party are saying that despite this balancing the government's books is much more important than helping people by using government deficit funding.
We really are in deep, deep trouble.
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I believe I am one of many.
1) I have dispensed with anything non-essential from my family life
2) Expenditure now concentrates on only the essentials, repairs, and renewals
3) My financial situation is worsening, with each calendar month
I have literally cut everything to the bone; food choice and food quality is now being affected.
I am three to four months away from not being able to pay my utility bills; what will happen then? I am facing the real possibility of having to either:
1) Move my family in with other family member
2) Being put in a position where my mortgage starts getting defaulted
I wish I could answer those questions
Where does this end? Just look Sri Lanka.
Indeed…..
Economic ignorance based on failed dogma has real life consequences
Social Unrest on the way?
Yes
Looking at Dave’s response, I’m really saddened by all this.
But also, the humiliation that people are going to go through is appalling and could have appalling consequences too.
My mental health is deteriorating; a large percentage of this is the stress and anxiety caused by financial insecurity and instability. I do not know where things will end up. I feel at breaking point etc, like many others.
My mental health is deteriorating; a large percentage of this is the stress and anxiety caused by financial insecurity and instability
The other day I walked into the local shop near where I work and found a youth arguing loudly with the shop keeper over the cost of some Rizla cigarette papers. I ended up buying a couple of packets for the lad (40 p each!) to calm things down and made him promise not to fall out with the shopkeeper again. He patted me on the shoulder and walked off after I told him to make each one count.
The whole thing just seemed to sum up where we are as country after 12 years of The Cruel Party.
I suspect more and worse is to come.
This is exactly what the Tories planned for
Ripping tax money from citizens and then moving OFF
To a well paid lifestyle
Meanwhile last night Starmer whips Labour peers to ABSTAIN on move to give free school meals to all Universal Credit families.
Dear God, what is wrong with the man? What does the Labour party stand for any more?
According to certain persons on the street Boris was doing a good job. What would things be like if he had been doing a bad one? The yardstick for his supporters seems to be getting Brexit done and little else. At what point might we expect that those disadvantaged by Brexit and BJ’s performances in general, that voted for him, realise that they may have made an error?
On the same street the shop near where I work is on, there are huge disparities in economic capability. I watched yesterday as a I saw a man obviously trying out a new and no doubt very expensive all electric SUV up and down and around the old terraced houses. Nearby was a dumped car still waiting for the Council to come and tow it away. The street cleaning on this street is appalling BTW. People pay their utility bills at the shop.
There are people no doubt doing well and may see things differently but the whole thing to me is about cognitive dissonance the mix of signs of poverty and affluence all jumbled up. But for me seeing these things side by side is jarring and very noticeable.
I’ll work on the basis that H-L included what will happen to energy prices and likely food-price inflation forecast @ 20% for next year.
The interesting aspect in all this is the incapacity (inability?) of any party (tory-vulture, Liebore, lying Dems) to articulate alternatives – that address the probable realities mentioned above.
There are alternatives – certainly for energy.
On the income side – increases in minimum wages – would offer some small respite.
A recognition that much of inflation (as in 1979) was to do with energy price rises – not wages.
A recognition that investment (by what is left of Uk indsutry) is pitiful.
Etc etc. What do we hear? Zero. These points are not even mentioned by the main parties.
Liebore, given the recent gibbering by Reeves and covered elsewhere in the blog, shows that it is now a tory-vulture party-lite, a re-tread of B.Liar and his crew. Vote liebore – get Tory.
As others have already said, if things are as bad as H-L forecast, there will be civil unrest, possibly starting in the north. Climate could also have an impact: do not forget the events of the hot-summer of 2011 (mostly in London). If there is a long heat wave, things could get “interesting”.
“On the income side – increases in minimum wages – would offer some small respite.”
Increasing benefits would also ‘help’ ? The ‘net cost’ of benefits is much less than the ‘gross cost’?
Go to https://www.ons.gov.uk/peoplepopulationandcommunity/personalandhouseholdfinances/incomeandwealth/datasets/theeffectsoftaxesandbenefitsonhouseholdincomefinancialyearending2014
and download the xlxs file.
Table 2A is the relevant data.
One can ‘work out’ the net cost of payments to the bottom 10%.
If you don’t have EXCEL, then download Open Office for free.
Not just a cost of living crisis, it’s a crisis of Government, deliberate failure to act to protect those most vulnerable. And we have the unedifying spectacle of the putative next PM’s out-shouting each other to be the most fascist, promising ludicrous tax cuts combined with slashing public spending. Some of them manage to make Sunak look like a genius.
My wife spent many years volunteering for Citizens’ Advice. Debt was probably the most intractable problem, especially when left to the last minute.
I would urge anyone in difficulties, or anticipating difficulties, to go to CA immediately. They can give a lot of advice, look at whether you are claiming all your entitlements, do a budget, help reschedule payments and much more. Just talking to someone can be an immense help and relief.
As a former CAB volunteer, I agree that debt was the main issue for clients. Many would turn up with a carrier bag full of bills, letters, etc., that they had ignored until things got more threatening. The social security system does not help those who struggle. One chap would be eligible for financial help, including free prescriptions & dental treatment, for 6 months every year, when his income would then put him 50p/week over the limit for assistance until the next benefit uplift. I don’t hold out much hope for improvement for most ordinary people no matter which of the dire candidate clones becomes leader/PM.
Hi Richard, could you share the source on this press release please? Interested to read the whole thing. Thanks
Sorry – please go to their website
Your audience may be interested in Dr Tim Morgan’s latest article: “#235. The affordability crisis” as an explainer as to why this is happening.
https://surplusenergyeconomics.wordpress.com/2022/07/15/235-the-affordability-crisis/