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One In Six Britons Living Hand To Mouth

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http://www.ft.com/cms/s/2/a1cc43ac-92f7-11...144feabdc0.html

A third of Britons have no financial cushion

By Lucy Warwick-Ching

Published: August 27 2009 11:54 | Last updated: August 27 2009 11:54

One in three working people could meet their financial commitments for less than a month if they were made redundant tomorrow, according to a new study.

TNS Omnibus found that 32 per cent of people made redundant would fail to meet their current living expenses in the first month, with one in six defaulting immediately.

The figures raise concern over Britain’s vulnerability to the rapid changes in fortune experienced by many during the current recession.

Despite government and financial services providers’ warnings of the need to plan ahead, less than half of working adults questioned had sufficient funds in place to survive more than three months. Just 1 per cent could manage redundancy for 18 months to 2 years – a realistic possibility if Britain’s economy enters the predicted ‘double dip’.

Three quarters of Brits questioned have cut down on their spending in the last 12 months, but the research shows that this has failed to give them the cushion needed to weather a job loss. And despite predictions of ‘green shoots’, 32 per cent of people are ‘very’ or ‘fairly’ fearful of losing their job in the next few months due to the economic climate – suggesting that concern about not meeting financial commitments could become reality for many.

Sue Homeyard, at TNS Omnibus, said: “Most people are trying to cut down their spending – whether it be on holidays or groceries – but for the majority, this clearly isn’t giving them the reassurance they need.

“With a third of workers fearing for their job in the next few months, the picture does not look good; people need to take more drastic action to plan for the possibility of redundancy. Simply cancelling a gym membership or having a staycation does not go far enough in providing the cushion we need to meet living costs once a salary goes.â€

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And that's the point where the rather large elephant in the room suddenly becomes visible to most people.

You can cancel a gym membership and cut back on the groceries. But the monthly repayment on the £8k credit card is a little harder to get shot of. I know, I've been there.

As CST says above, consumption is going to be massively down. 3 million expected unemployed, and multiple millions more living in fear of it. Doesn't bode well.

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Plenty of people consider their unused credit card limit as "savings". They consider this to be their financial cushion. I have a friend whose job was threatened and his first act was to apply for a couple more cards in case he needed to be tided over for a period.

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Worse in the US: 34% of workers have one week's savings or less:

http://globaleconomicanalysis.blogspot.com...ne-week-or.html

This is why the whole shebang is over. No consumers > no retail > no production > no jobs > no homes > no consumers etc.

Not looking good this global recovery, but still if we keep saying global recovery we'll get recovery.

Groupthink can overcome reality.

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- why is the unsecured credit card debt harder to get shot of? Call them up, say your unemployed and on the social, offer them a tenner a month. Simples ;)

Not that i'll be doing this of course. :P

Because unfortunately the banking scum want to have their cake and eat it too. They now can get 'charging orders' put against major assets you may own (typically your house).

They charge you unsecured interest rates (to cover the fact that unsecured debt is higher risk) but then efffectively get itreated as secureed debt (which should attarct lower rates).

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You don't have to be feckless not to have savings.

Lowish wage plus high taxation, high housing costs, high fuel and high council tax makes putting a bit by very difficult even for the prudent.

Many of the population are under severe financial stress and the primary reason is a society that has high taxes and high welfare costs. The government takes far too much of our money and wastes 9/10 ths of it.

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Plenty of people consider their unused credit card limit as "savings". They consider this to be their financial cushion. I have a friend whose job was threatened and his first act was to apply for a couple more cards in case he needed to be tided over for a period.

Different way of thinking.

In a sense he's right, it's a tide over until he gets his next job. Though that does assume it comes along fairly soon.

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You don't have to be feckless not to have savings.

Lowish wage plus high taxation, high housing costs, high fuel and high council tax makes putting a bit by very difficult even for the prudent.

Many of the population are under severe financial stress and the primary reason is a society that has high taxes and high welfare costs. The government takes far too much of our money and wastes 9/10 ths of it.

This the root of the problem. Too many people on low pay in a high cost economy. If I remember correctly, 10 years ago, a certain Mr T. Blair promised an end to rip off Britain. Unfortunately, Labour Politicians all have pet projects in their back pockets, these cost money and the twerps are utterly convinced that they can be funded by 'soaking the rich'

So instead of sense, we got stealth taxes

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