One expert has recently warned that household finances such as savings accounts are on track to decrease in 2011 across the UK. Additionally both individuals and families will experience an extended period of tighter household finances as far as the options they have for the expenditure of funds, such as credit cards, are concerned.
Investment and Business News online editor Michael Baxter has stated that the coming year will result in less cash for many households across the length and breadth of the UK and as their normal sources of funds, such as current accounts, dwindle the likelihood that people will dip into their savings accounts to fill any resultant gaps is quite high.
As household finances are for the most part dependent on take-home pay but in the wake of the global economic crisis, many workers are seeing very poor wage increases due to the poor economic landscape, stated Mr Baxter.
In many cases, Mr Baxter continued, the inflation rate currently exceeds the increase in wages, a circumstance that often leads to savings accounts being raided in order to keep up with the cost of living.
Industry experts say that even if UK households do not resort to draining their savings, due to the high inflation rate, even the best savers offer interest rates that are quickly eroded by the 3.1 per cent Consumer Price Index.
Mr Baxter’s comments come following the release of research findings recently published by lifestyle protection and mortgage insurance firm Genworth Financial that found that financial vulnerability amongst households across the UK has once more increased in the wake of this year’s general election.