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Monthly Pay Barely Covers Half The Month

by Jim ONeil on February 11, 2012

in uk loans news

The average worker in the UK spends half a month worrying about whether enough money is available. This recent discovery by Halifax bank has many experts concerned. Research from the bank indicates that workers typically run out of money just 17 days after being paid each month.

Of the over 2,000 adults surveyed, ten percent reported that the financial pinch began only a week after payday. By the final week of each month, more than half said they typically struggled to make ends meet.

Based on these statistics, it is no surprise that five percent of those surveyed claimed to check their bank account balance one or more times each day. Twenty-two percent said they checked the balance four or more times a week. An amazing forty percent have committed their bank balance, to the nearest £5, to memory.

Internet banking and mobile banking apps have made it easier for account holders to monitor account activity, said Halifax director of current accounts Anthony Warrington.

Mr. Warrington called the move by consumers to control bank balances “encouraging.” What is not so encouraging is the fact that those balances tend to be much smaller, due to the reduction in take-home pay. According to the Trades Union Congress, UK workers take home £60 billion less each year in real terms than they did 30 years ago.

Poor growth in earnings, a widening pay gap on the career ladder, and increased personal debt have eroded income.

Workers have become more productive but do not appear to be compensated for it. In 2000, the pay ratio between corporate executives and lower level workers was 47:1. By 2011, this ratio had more than doubled to 102:1. Workers who manage to make it to the upper echelon are rewarded but there are very few jobs compared to the lower ranks.

Though the average family in the UK decreased its debt by £355 during 2011, it is far from out of the woods. About £7,900 in credit card balances, overdrafts, and personal loans remains. For many UK families, payday loans represent a portion of this financing.

These loans are becoming the go-to financing for consumers unable to qualify for bank loans. No credit check loans provide small amounts of money designed to bridge the financial gap experienced between paydays.

With the recent news from Pricewaterhouse Coopers that UK families are some of the most indebted on the planet, many financial experts are focusing on the region. So are payday lenders, who are moving their establishments from dark alleys onto High Street, attracting busy professionals who need cash quickly.

Customers visit a payday lending establishment during their lunch hour and have the cash by the end of the day.

Bank of England Governor Sir Mervyn King astutely noted that UK workers are experiencing a “ferocious squeeze” when it comes to take-home pay. He revealed that the average private sector pay increase is 4.2 percent, which is below inflation.

This leads one to conclude that payday loans and other forms of borrowing will continue to be very popular.

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