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Brits face struggle to pay mortgage

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14/05/2015
More than a third of Brits would struggle to pay their mortgage or rent if they lost their income.

Research conducted by the AA found that 36% of people said they would be unable pay for their housing costs if their income fell.

More than two-in-three respondents (69%) said they would be reliant on their savings to keep themselves afloat. Some 17% said they would be forced to use a credit card to stay afloat with this figure rising to 41% of under-35s.

The survey found half of people would struggle to pay for essential items if they lost their income. Car running costs (54%), utility bills (50%) and other household bills (43%) would be the most difficult to pay.

Most people (78%) said they had savings set aside for such emergencies, with the typical person having £9,359 as a back-up. Those aged 35 and under were least likely to have any form of savings.

Mark Huggins, director of AA Life Insurance, said having a back-up plan was good, but many would struggle after a short period.

“It’s always wise to have a financial safety net so it’s good to see that so many people are saving,” he said.

“But figures suggest that the average weekly spend of a British family is £517, which would mean that a family with savings of around £9000 could see them disappear in around 18 weeks.

“The thought of relying on a lower or no income at all can be daunting, especially if there are children or other dependents to think about. I think most people recognise that having a financial plan in place in case something happens to the main breadwinner is a wise thing to do, yet many people understandably find it a difficult topic to broach with their family.”

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