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32% of UK Adults Feel Pressured to ‘Live Beyond Their Means’: Nerdwallet Reveals Worrying Statistics

Around 32 per cent of UK adults are pressured to spend more than they can afford with millennials, men and high earners most likely to fall into debt; according to new research from Nerdwallet, the personal finance firm. 

Nerdwallet revealed that millennials are the most likely age group to find themselves in debt, with 44 per cent using credit cards, overdrafts or personal loans at least sometimes to pay for their lifestyle. Meanwhile, 64 per cent of men are more willing to take on debt to pay for their lifestyle, compared with 47 per cent of women.

The report, which comes from NerdWallet UK, a platform that provides financial guidance to consumers and small and mid-sized businesses, highlights that many Brits are struggling to fund their lifestyle without resorting to debt.

Overall, around 30 per cent of the 2,000 UK adults surveyed are using credit cards at least some of the time. People are also turning to interest-heavy loans or overdrafts to help bridge the gap.

The study reveals that millennials are least likely to understand their debt levels, leading to them feeling ‘worried’, ‘scared’, ‘hopeless’ and ‘confused’. Adults aged between 25 and 44 appear the most likely to fund their lifestyle using credit cards, overdrafts or personal loans. Almost 10 per cent of those aged 25 to 44 said they fund their lifestyle using debt ‘very often’, compared with an average of four per cent across all age groups.

Living in London makes it three times more likely that someone will take out a personal loan to pay for their lifestyle with a staggering 39 per cent of Londoners admitting to doing so said they’ve done this, compared with the national average of 13 per cent.

Higher incomes don’t equate to fewer debt worries

Higher interest rates and inflation have put financial pressure on many households, and bringing home a bigger salary does not necessarily protect consumers from the cost-of-living crisis.

The Nerdwallet survey also found that those in higher income brackets use more debt than those in lower income brackets. Those earning above the median UK salary of £34,963 may be more likely to use debt to fund their lifestyle, with around 23 per cent of those earning £40,000 per year or more saying they find themselves in debt ‘sometimes’, ‘somewhat often’ or ‘very often’.

A quarter of those earning £60,000 or more say they fund their lifestyle using credit cards ‘very often’ or ‘somewhat’ often. This is compared to 21 per cent of those earning between £40,000 and £60,000 and only 13 per cent of those earning between £20,000 and £40,000.

Amy Knight, spokesperson at NerdWallet UK
Amy Knight, spokesperson at NerdWallet UK

Amy Knight, spokesperson at NerdWallet UK, commented: “There seems to be a worrying trend when it comes to consumers feeling pressured to overspend and live beyond their means. Debt worries are universal, which is why everyone, no matter their background or level of income, should take steps to build their financial fitness.

“There is a perception that budgeting can be difficult, but it’s an important project for all of us to undertake, in order to manage our outgoings and avoid expensive debt. This is especially true during times when economic factors outside our control are putting many households under greater financial pressure.

“Getting to grips with their spending behaviours and setting limits can help individuals and families to weather the ongoing cost of living and successfully reach their financial goals, no matter what those might be.”

UK spending priorities

Broadband internet emerged as the most important essential outgoing to UK adults, becoming ‘very important’ or ‘somewhat important’ to 86 per cent of UK adults surveyed.

For 52 per cent of those surveyed, essential outgoings like rent or mortgage payments are at least ‘somewhat important’, with fuel coming in at 46 per cent.  This suggests that, with a rise in hybrid and home working, broadband is now a non-negotiable essential.

After essential costs, self-care is an important spending category for many UK adults. Thirty per cent of Brits consider wellness activities, such as gym memberships, somewhat or very important. Even more UK adults prioritise spending on hair and beauty appointments, with 43 per cent citing these as very or somewhat important to them.

Spending on non-essential treats is a lower priority to UK adults, but remains important to many of those surveyed, with 21 per cent prioritising takeaways, 28 per cent meals out and 27 per cent alcohol.

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