KPMG commissioned YouGov to conduct a survey which reveals that 19% of people will see over 50% of their wage go straight out on mortgage/rent, utility bills and groceries. Tony McDonough reports
Almost a fifth of people in the North West will spend more than half of their monthly salary on the day it hits their account, a new study reveal.
KPMG commissioned YouGov to conduct a survey which reveals that 19% of people in the region will see over 50% of their wage go straight out on mortgage/rent, utility bills and groceries.
And 25% listed credit card payments as a significant outgoing on payday, with 18% of respondents also citing other unsecured debts as one of their top three priorities in the first 24 hours after being paid.
However, people in the North West fare much better on payday than other parts of the country. The region’s residents are the seventh biggest payday spenders in the UK. The top spot goes to people in the West Midlands, 26% of whom spend more than half their wages the day they come in.
Across the UK, 22% of 25-34 year olds spend 60-100+% of their pay as soon as they get it, with 3% finding themselves in the red by the end of the day. Conversely, just 8% of over 55-year olds see more than 60% of their income leave their account on pay day.
The findings tally with the recent FCA study which found 13% of 25-34 year olds are in financial difficulty, having missed paying domestic bills or credit payments in three or more of the last six months.
Jennifer Lee, head of tax at KPMG in Liverpool said: “It’s not surprising that the majority of payday spending goes towards household running costs, be it utility bills, mortgage payments or rent.
“What is concerning is the high number of people in the North West who are spending significant amounts paying off unsecured debt and credit cards.
“The fact that significant numbers of the working population in the UK are routinely relying on credit demonstrates the critical importance of improving productivity and consequently wages.”