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January 10, 2008

Unexpected events cause widespread financial hardship

by Gill Montia

Story link: Unexpected events cause widespread financial hardship

New research published by Abbey reveals that over the past two years, almost 15 million Britons have experienced some sort of financial hardship because of a life-changing event.

Job loss, bereavement and illness feature in the list of events that have disrupted personal finances and in one-third of cases, respondents had no warning of difficult times ahead.

Nici Audhlam-Gardiner, head of mortgages at Abbey, comments: “What’s interesting is just how many people experienced a big life change in the relatively short period of two years.”

The study highlights the need for what used to be called “rainy day” savings and Kevin Mountford from financial website, Moneysupermarket.com, recommends that British consumers should aim to have at least three months’ salary set aside for unexpected emergencies.

Meanwhile, a new survey from Norwich Union has suggested that over 40 million people ran out of cash this week, having been paid early in December and failed to juggle finances over Christmas and the New Year.

Forty-three per cent of respondents named January as the most stressful time of the year for finances and 19% said they did not expect to have enough money to pay this month’s household bills.

As a result, 19% of people questioned will use their overdraft facility, 16% will rely on credit cards, 14% draw on savings and 4% will ask family and friends for help.

The survey found that, on average, people spend an extra £781.86 over the Christmas period: £379.81 on gifts; £113.88 on socialising and £45.83 on travel.

 

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