One in four (24%) adults in Yorkshire & Humberside ran a ‘deficit budget’ in the past month, spending more in the past month than they received in income, according to new research from R3, the insolvency trade body, and ComRes. This is slightly lower than the British average of 28% of adults spending more than they received in the last month.
In Yorkshire and the Humber,15% spent up to £100 more than they received in income over the past month (17% across Britain); 6% spent between £100 to £300 more (7% in Britain); and 2% spent over £300 more (3% in Britain).
R3’s research follows statistics from the ONS which show that households have been in a budget deficit for a record nine consecutive quarters (Oct 2016-Dec 2018), while the average UK household spent £900 more than it received in income in 2017.
Nearly a fifth (18%) of Yorkshire & Humberside respondents to R3’s research said they do not have any savings at all at the moment, showing that levels of financial resilience are low for many people. This is lower than the Britain-wide figure of 22%.
Eleanor Temple, chair of R3 in Yorkshire and barrister at Kings Chambers in Leeds, commented: “This is a worrying snapshot of Yorkshire & Humberside adults’ personal finances.
“For some people, a month of deficit won’t be an issue, as it may be a one-off, and they may be able to cover the overhang through using savings, or borrowing. However, for others, these options will be less readily available, leading to potential problems ahead if the deficit persists.
“With our research finding that a sizeable minority of Yorkshire & Humberside adults don’t have any level of savings at all at the moment, it’s worth sounding the alarm about people’s ability – or otherwise – to cope with unexpected hits to their finances. Debt issues can suddenly spiral due to changes in circumstances, and overspending each month does not leave any room for saving for a significant proportion of people.
“For some, a monthly overspend is a more regular occurrence, and this group should seek advice on personal finances as soon as possible: Even a relatively small amount spent over budget in a month can add up to a much larger problem over the course of a year.”
The research found that 7% of adults in Yorkshire & Humberside reported that they have borrowed £100 or more from family or friends in the last month.
Eleanor Temple continued: “Whether the overspending is funded through using existing savings or through formal or informal loans, it is a sign that all is not well, despite record levels of employment. A single month of a deficit budget isn’t necessarily a cause for panic, but if they’re happening with regularity or increasing in frequency, talking to a qualified and professional debt expert is a must. Taking no action will only see problems snowball.”