Despite the recession, the average monthly household income in the UK reached £2,150 in May 2012 – an increase of 4 per cent compared to £2,062 for the same period last year, according Aviva's latest family finances report.
The study of 12,164 consumers aged between 18 and 55 found that 72 per cent of families now receive income from a full-time “primary” income (compared to 69 per cent in January), while 36 per cent also benefit from a secondary income earner, up from 33 per cent over the same period. Some 12 per cent of families also report that the primary earner has a second job.
Average monthly income of single-parent families fell by 8 per cent to £805 in May (2011: £874). While income from state benefits decreased across the board following government reforms by 18 per cent in May (2011: 23 per cent) the picture is harsher for single parents, with just 42 per cent now reporting income from benefits, compared to 61 per cent a year ago.
Savings by UK families increased by 6 per cent to £1,163 in May (2011: £1,228). In line with this, the number of families with no savings at all has fallen to a record low of just 24 per cent.
The average debt of UK families was £9,314 in May (2011: £5,878), an annual increase of 58 per cent. However, debts have fallen 11 per cent since the start of the year.
In the study, 42 per cent of families said that they hold life insurance, up from 36 per cent May 2011, while 14 per cent have critical illness cover, compared to 13 per cent a year ago.
The average monthly expenditure of UK families stands at £1,680 in May (2011: £1,681), while the average amount spent on housing (mortgage or rent) fell to 19 per cent in May.
Richard Kelsall, head of savings at Aviva, said:
Many UK families have experienced tough times in recent years, so it’s reassuring to see that people are getting to grips with their finances to weather the storm. Incomes have risen and debts are falling, which suggests that families are working hard to get on an even keel.
It’s also good to see that more families are planning ahead and trying to create a cushion against harder times. People are waking up to the value of protection insurance, and many seem to be getting into the savings habit, with more than ever stashing money away for a rainy day. Families face financial pressures on so many levels, with everything from car repairs to university fees to contend with. But by taking a step back and looking at their priorities in the long term, people can help to safeguard their futures.