By Daniel Hunter
Many adults are struggling to save with just a fifth of adults managing to stick to their personal budgets, according to a report by the Money Advice Service.
The Financial Capability of the UK report reveals that more than one in ten people tend to buy things on credit rather than save for them.
The Money Advice Service surveyed 5,079 people about their spending habits and found that peer pressure is one factor that leads to some people overspending.
“I’ve got seven credit cards, all maxed out. I use them for going out for drinks and stupid things, you just do, don’t you? Peer pressure, I suppose if your mates are going out all the time and you’re not, it makes you want to go out and stick a night out on one of them. You don’t have to pay anything,” said one respondent to a Money Advice Service survey.
Two in five respondents to the survey admitted they sometimes or always use a credit or store card to pay for goods when they don’t have enough money to cover the bill. Just below one in four dips into their overdraft at least some of the time, leading to them paying bank charges.
Around two in five have tried to manage their money so they don’t miss any further payments or incur further overdraft charges, while a similar proportion have already started to make up for missed payments. However, less than one in five have spoken to their lender when they have found themselves slipping into the red.
“In theory, money management is easy — spend less than you earn and consider your future, but the difficulty comes when applying this in the real world. This report reveals just how difficult it is at the moment for so many of us,” Caroline Rookes, chief executive of the Money Advice Service, said.
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