Even the wealthy struggle with money in austerity Britain

By Financial News
Even the wealthy struggle with money in austerity Britain

Money worries are stressing high earners as more wealthy families are switching to cheaper supermarkets and dipping in to their savings to make ends meet, according to a new survey.

Family finances are worrying for many as 14% cannot see the time when their finances will cover their spending, rising to 20% of those struggling the most with money.

The six-monthly report by insurance and pensions giant Axa highlights what families and individuals really think about their finances.

Many are pessimistic about their financial health, and after years of austerity have no confidence that their situations will improve as household spending fell 0.6% in the first three months of the year.

The findings showed that financial pessimism was widespread across most age groups, with 28% of households buying less food while 25% were also forced to rein in spending on gas, oil and electricity.

Can’t survive without borrowing

Even a third of the wealthiest disclosed they were switching to cheaper supermarkets for their basic food shopping and raided their savings to make ends meet. The wealthy were also taking longer to pay bills, with 13% confessing they ignored them until final demands arrived.

Another 14% admitted they ‘simply could not survive without a large overdraft or credit card’.

One in five consumers (20 per cent) stopped saving  – a 3% rise in six months.

The relentless squeeze on household finances was seemingly too much for some as 6% pensioners said they did not know how much debt they have on cards and loans), while 15% younger consumers ignored bank and card statements.

AXA’s marketing director Cheryl Toner said: “A pattern of relentless economising has set in since our survey began in early 2011, and it’s showing no signs of easing. It’s alarming to see that even those deemed ‘untouchable’, the more comfortable sectors, are now feeling the pinch.

Better financial education

“Severe cutbacks are evident almost regardless of affluence levels. However, it is encouraging to note that the younger population feels quietly confident, and that there is growing sentiment that better financial education and more personal responsibility is needed to take control of financial concerns.”

As a result of concerns about budgeting and money management, many called for the government to introduce better financial education at school.

Around 38% believe that financial education should be part of the national curriculum, while 44% want the government to play a stronger role in educating young people that material possessions should be earned.

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