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With the cost of living crisis at the forefront of many people’s minds, it’s unsurprising that financial wellbeing is a hot topic right now.
People are anxious about whether they can cover the cost of groceries and if they’ll be able to afford to put the heating on this winter. It’s a worrying time for a lot of people and many are finding it tough financially.
Cutting back and borrowing more
A digital survey carried out by YouGov on behalf of HSBC found that 60% of Brits whose finances have been affected by price rises are cutting back on spending. Some are having to borrow more money because of the increases in the cost of living.
The research showed that one in five (21%) are now actively saving money for future bills, while one in ten are spending more on credit cards (10%). A further 5% have taken out a loan or an additional credit card because of pressure on household budgets.
Although 6 in 10 people do say they have still managed to pay their credit card balance in full every month, amongst the younger age bracket of 18-24 year olds these figures rise sharply, with 10% admitting they’ve missed or been late with payments four or more times in 6 months.
Another trend shown among this age group is not understanding a lot of the common terms used by lenders. For example, 48% were unaware of the meaning of APR, and 46% not understanding the term ‘base rate’.
So for those of us not so sure, what is APR?
It stands for Annual Percentage Rate. HSBC say ‘It’s the cost of borrowing money over a year on a credit card or loan. It takes into account interest, as well as other charges you may have to pay.’
Further worrying statistics arising from the survey show that households with children are more likely to struggle financially, being less likely to be able to pay off their balance in full every month. Those with younger children aged under 4 are nearly twice as likely as non parents/guardians to say they only pay off what they can afford each month.
What can you do if you’re worried about the cost of living?
If you’re struggling to cover your living costs, you might be able to get help from your local council or the government for essential things like food and bills. You may be eligible for support such as the Household Support Fund and Cost of Living Payments.
It’s also worth looking into what benefits might be available to you and if you need help or advice on dealing with debt and repayments. Citizens Advice is a good place to find information and guidance on what kind of help is available.