Millions of people are living well beyond their means by spending more than they earn, new figures show. Around seven million UK adults are showing an alarming disregard to their personal income to fund their lifestyle, research by Bright Grey has found.
The average person requires a net income of £1,706 to live a comfortable life – 27% more than the current average monthly wage. It means that on an annual basis the average Briton is falling £4,320 short of their ideal salary to support their lifestyle. Despite this significant shortfall and having to endure a recession, eight out of ten (82%) people have not altered their spending over the last 12 months, while an additional 6% have actually increased their outgoings.
Almost a third of people (29%) say that their spending sometimes puts a strain on the household finances. An additional 3.9 million adults (8%) admit their spending has put their household's finances into debt.Worryingly, another 4.9 million (10%) adults stating they do not have a clue how much they actually spend each month in relation to their earnings.
The most common reason for overspending is 'just because I have to' (30%), however 21% say they enjoy their lifestyle too much to give it up. A further 15% say they are simply hopeless with money and 11% admit they use credit to keep up with high-earning friends.
"Even in an Age of Austerity the public's spending shows no sign of waning, as the average UK adult continues to spend beyond their means and rack up debt," said Roger Edwards, proposition director at Bright Grey.
"Worryingly, this is mainly due to the average salary being far short of that needed to lead a comfortable life and those who just can't help but spend either to fund their lifestyle or just to make ends meet."
"Whilst Bright Grey is not suggesting people change their lifestyle or spending habits, we do urge consumers to be aware of their finances so they can enjoy their lifestyle without having to worry about going into the red."
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