CM December 2023

NEWS ROUNDUP
Seven million adults forced to
borrow to pay bills this winter
AS UK households begin switching
the heating on, seven million people
are reliant on credit to pay their bills
this winter according to research from
Creditspring.
Despite a slight dip in inflation,
Creditspring warns that many people
are set to enter winter with no financial
buffer and could be forced to turn to
credit they cannot afford in order to
survive. Nearly eight million people (15
percent of the adult population) admit
they’ll be forced to borrow to get by in
the next six months.
A quarter (25 percent) of UK adults
are forced to dip into their savings each
month just to make ends meet, however
the ongoing cost-of-living crisis has
depleted this financial cushion for
many households. In fact, one in five
people (18 percent) say they’ll need a
loan once their savings run out. Even
more worryingly, the research shows
that one in five (21 percent) of adults
don’t have any savings to fall back on
at all.
Three in 10 (30 percent) of people
say they are terrified for their financial
future and a third (33 percent) feel stuck
believing there is nothing they can do
to improve their financial situation. In
total, almost four in 10 (38 percent) – or
20m people – say their financial future
is unpredictable and they’re uncertain
about their future position in six
months.
Neil Kadagathur, Co-Founder and
CEO of Creditspring, says that although
last year was tough, millions of people
are in an even worse situation now:
“For many, it is a question of not just
eat or heat – but how to ensure they
can do either. As we approach another
winter of high energy costs, many
households have nothing left to fall
back on and are hugely concerned
about how they will survive the next
few months.
£32 billion hole in UK savings pots
as cost-of-living crisis continues
NEW Cost of Living research from Royal
London, the pensions and investments
mutual, suggests UK consumers have
raided their savings to cover the rising
cost of living. The cost of housing,
food and energy bills have risen by an
average of £494 a month by September
this year when compared with August
2022.
The survey of 4,000 adults found
that more than one in five people (23
percent) have dipped into their savings
as a direct result of rising living costs.
The average amount that people have
had to take out of their savings is £2,623,
which equates to a staggering £32bn
being used to counter rising household
bills.
There was positive news as overall
savings levels were up amongst those
surveyed, but this was largely driven by
mortgage-free homeowners, who have
double the average amount in savings
of the sample as a whole (£33,858 vs.
£17,575). Renters, especially those who
live in social housing, have £3,642
in savings compared to those with a
mortgage who have £11,601 – which is
over three times as much. Worryingly,
one in five people (21 percent) have less
than £100 in savings, a figure that has
been consistent since March.
The research also found that
three quarters of UK consumers (76
percent) were concerned about rising
interest rates, following 14 consecutive
rises in Bank of England Base Rate
since December 2021. More than
eight in ten renters (82 percent) said
they are worried about rising rental
payments, with the same proportion
of homeowners with a mortgage (80
percent) stating they were worried about
mortgage costs. This compares to four in
10 renters and a third of mortgage payers
being worried a year earlier.
While the rising base rate has resulted
in improved savings one in six people (16
percent) state that they intend to cover
future rising bills with money from their
short-term savings, meaning they’ll
benefit less from the higher interest
rates now on offer as they draw out their
savings to cover rising bills. Almost
half of people (46 percent) who have or
plan to take money from their savings
have focused on their ‘rainy day funds’,
proving that the sentiment of putting
some contingency aside has served
many people well.
>NEWS
IN BRIEF
Managing risk
LENVI, a leading provider of
commercial lending software and
solutions to the factoring and
receivables finance market, has been
appointed by BNP Paribas, to support
its European risk management and
operations functions through its risk
management software Riskfactor.
Lenvi will support BNP Paribas
in reducing risk and improving
operational efficiency. Through the
implementation of the full-service
risk management and fraud analytics
software for receivables finance,
Lenvi says Riskfactor will enable BNP
Paribas to better prevent and manage
risk and fraud.
Women’s Lib
SECURITY, openness and inclusion are
the most crucial factors that women
look for when obtaining financial
services in their daily lives, a report
produced by Futura, Solaris’s network
for women in fintech has discovered.
When it came to evaluating what
women typically want from financial
services, building financial security
was the main factor noted by 77
percent of respondents ahead of
wanting to grow their money in the
long term. Saving for retirement was
third most popular at 68 percent with
protecting themselves from inflation
and other crises being acknowledged
by 47 percent. By contrast, just eight
percent of respondents said they’re
motivated by increasing social status.
Artificial Intelligence
MORE than a third (38 percent) of
small businesses have used, or are
considering using, AI according to new
research from Small Business Britain.
However, the research also found
signs that entrepreneurs will need
support to upskill in this area, as only
22 percent of small businesses say
they understand how to best deploy AI
within their business. Only six percent
of business owners say they have cut
staff due to new technology, a statistic
that is more than balanced out by the
ten percent who have created new
roles to manage digital projects.
Brave | Curious | Resilient / www.cicm.com / December 2023 / PAGE 7