Brits borrow more frequently than European neighbours
UK consumers are financially aware, but borrow to pay the bills survey shows
UK consumers are near the top of the class when it comes to financial literacy, according to new research. But they’re also far keener on borrowing than their European counterparts.
The study, by credit management services company Intrum, found that 75% of UK consumers could match financial terms to their correct definitions – only the Finns do better.
The majority of UK consumers surveyed (70%) also feel they get enough financial education to manage their daily finances.
But they are much more reliant on borrowing, with 22% obtaining credit to pay bills over the past six months, and 63% of them doing so more than once. That’s almost double the European average of 38%.
Intrum collected insights into the financial habits of European consumers in 24 nations, to rank countries by financial wellbeing. The survey asked 24,004 people about their ability to pay bills on time, their levels of borrowing and saving habits, as well as financial literacy. The UK came eighth in the overall ranking.
Worries over rising bills and Brexit
The findings reveal that almost half of UK consumers (49%) say their bills are going up faster than their earnings. And 35% think worrying about this is having a harmful effect on their wellbeing.
It also shows that 26% admit to not paying one or more bills on time in the last 12 months.
"UK Consumers are more financially literate than most of their European peers," Intrum's UK managing director, Eddie Nott, told the Press Association. "However, the reliance on credit to pay bills means that many don't have the reserves to cope with the financial impact of a significant life event such as job loss, illness or bereavement. These unpredictable events often lead to problem debt."
The survey also shows that Brits are keen on tech: 67% say it makes it easier to manage their finances, compared with the European average of 59%. But 56% worry that smartphone apps might tempt consumers into loans they can’t afford.
Another concern is Brexit, with 42% concerned that a weakened European Union might have a negative impact on their personal finances.
Eddie Nott added: “While we see consumers are keen to use smartphone-enabled technology, concerns over data security and fraud remain, along with the pressure to overspend and the temptation to borrow more than they can afford.”