Five questions answered on a new survey about the UK’s finances

The Money Advice Service has released the results of its latest survey into people’s finances. We answer five questions on the survey’s results.

So, what’s the overall picture of people’s finances in the UK? 

Not so great. According to the survey 52 per cent of UK adults said they are struggling to keep up with bills and debt repayments. Unsurprisingly, this is up compared to 35 per cent in a similar study in 2006. 

In Northern Ireland people are struggling even more, some 66 per cent saying they were struggling.

How many people did the survey involve?

The Money Advice Service, which is a government backed website, surveyed 5000 people and followed 72 families over the course of a year to see how they managed their money. 

They intend to repeat the survey quarterly, surveying a total of 10,000 people, to get a better picture of the nation’s finances. 

What else did the survey reveal? 

Those finding it hardest were in the North West area of the country, with 60 per cent of people saying they find it tough to make their money last to the next pay day. 

 Twenty-one per cent of people said they had experienced a large drop in income, while 42 per cent said they would have to have a think about how to pay for an unexpected bill of £300.

It also revealed that although most people are keeping a tight track on their finances, some have no idea how much money is in their bank account. Of those asked, 84 per cent they kept a track on their money, while 16 per cent were unable to identify the balance on a bank statement.

What have the Money Advice Service said about the results of the survey? 

“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," said Caroline Rookes, chief executive of the Money Advice Service.

"This report reveals just how difficult it is at the moment for so many of us, but also highlights ways we are adapting to manage financially."

What has the treasury said about the survey’s findings? 

A spokesman for the UK Treasury, speaking to the BBC, said: "We recognise that times are still tough for families, but Britain is holding its nerve, we are sticking to our plan and the British economy is on the mend.

"This report shows that, despite these tough times, managing your everyday finances effectively can really help to make things a little easier, which is why the government continues to support efforts to boost people's financial skills."

Photograph: Getty Images

Heidi Vella is a features writer for

Photo: Getty Images
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Autumn Statement 2015: George Osborne abandons his target

How will George Osborne close the deficit after his U-Turns? Answer: he won't, of course. 

“Good governments U-Turn, and U-Turn frequently.” That’s Andrew Adonis’ maxim, and George Osborne borrowed heavily from him today, delivering two big U-Turns, on tax credits and on police funding. There will be no cuts to tax credits or to the police.

The Office for Budget Responsibility estimates that, in total, the government gave away £6.2 billion next year, more than half of which is the reverse to tax credits.

Osborne claims that he will still deliver his planned £12bn reduction in welfare. But, as I’ve written before, without cutting tax credits, it’s difficult to see how you can get £12bn out of the welfare bill. Here’s the OBR’s chart of welfare spending:

The government has already promised to protect child benefit and pension spending – in fact, it actually increased pensioner spending today. So all that’s left is tax credits. If the government is not going to cut them, where’s the £12bn come from?

A bit of clever accounting today got Osborne out of his hole. The Universal Credit, once it comes in in full, will replace tax credits anyway, allowing him to describe his U-Turn as a delay, not a full retreat. But the reality – as the Treasury has admitted privately for some time – is that the Universal Credit will never be wholly implemented. The pilot schemes – one of which, in Hammersmith, I have visited myself – are little more than Potemkin set-ups. Iain Duncan Smith’s Universal Credit will never be rolled out in full. The savings from switching from tax credits to Universal Credit will never materialise.

The £12bn is smaller, too, than it was this time last week. Instead of cutting £12bn from the welfare budget by 2017-8, the government will instead cut £12bn by the end of the parliament – a much smaller task.

That’s not to say that the cuts to departmental spending and welfare will be painless – far from it. Employment Support Allowance – what used to be called incapacity benefit and severe disablement benefit – will be cut down to the level of Jobseekers’ Allowance, while the government will erect further hurdles to claimants. Cuts to departmental spending will mean a further reduction in the numbers of public sector workers.  But it will be some way short of the reductions in welfare spending required to hit Osborne’s deficit reduction timetable.

So, where’s the money coming from? The answer is nowhere. What we'll instead get is five more years of the same: increasing household debt, austerity largely concentrated on the poorest, and yet more borrowing. As the last five years proved, the Conservatives don’t need to close the deficit to be re-elected. In fact, it may be that having the need to “finish the job” as a stick to beat Labour with actually helped the Tories in May. They have neither an economic imperative nor a political one to close the deficit. 

Stephen Bush is editor of the Staggers, the New Statesman’s political blog.