Aviva Family Finances Report 2013
In our Family Finances Report 2013, we look at the contrasting fortunes of different family types, examining trends that have emerged since 2011 and looking at the ways in which experience – and children – from past relationships can affect financial matters.
Families, savings, and income for the future
With or without children, the way our country’s families manage their net income – opening savings accounts, buying premium bonds, paying the bills – has had to change in recent years. The word ‘family’ means many things to many people. Here in the UK, a ‘traditional family’ is very different to what it once was, as social and economic drivers impact people’s approaches towards living as a unit, working and planning the finances that affect a family unit – however many people are involved.
In the April 2014 budget, George Osborne said, ‘support for savers is at the centre of this budget,’ and David Cameron iterated, ‘we should do everything we can to help hard-working families’. Our Family Finances Report 2013 report shows that these are timely statements, as many families have had to adjust their approach to money management in response to very personal challenges over the last couple of years.
Many argue that disposable income is still down; the cost of living (and certainly the consumer price index) is up, and the impact of separation, getting divorced and remarriage is still altering our outlooks on managing money, in many different ways. In Aviva’s Family Finances Report, we look at these issues in detail.
Income – is it really on the up?
It seems that divorced, separated and widowed families are still suffering, with incomes down as a whole by 14% over the last three years, but couples with one child are benefiting from an increase of 18% and it looks as though family income as a whole is up across five of the main six family groups we’ve identified. In fact, despite ever-present unemployment statistics, figures show that, overall, families are earning 12% more than they were in January 2011. But is that a tangible rise in their current accounts? And how are families managing those extra funds?
Saving together – easier, or better?
The research showed that, happily, the level of families with no savings in this country has fallen from 33% to 20% since January 2011. All but one of the family types we explored has seen an increase in savings recently. But does this mean families are more aware of improved savings rates, or simply finding it easier to spare the funds?
In the Family Finances Report, we also look at some of the key issues that appear to be worrying families as a whole in the UK today:
- The cost of living – 65% of families cite it as being a concern for them, partly as a result of inflation impacting the cost of food. But which families does this impact the most, those with children staying at home for University life – or those living as single-parent units?
- We’re all happier when we’re borrowing less – and it looks as though borrowing has dropped by 28% in the last 18 months. With the exception of credit cards, unsecured borrowing has definitely fallen over the last 12 months. But why, is it better money management – or greater use of overdraft facilities.
Spotlights on social change
As a result of our research, we’ve also uncovered some significant trends that have appeared in recent months: our spotlight shines on families who have had to make hard-hitting decisions, financially, that significantly affect their futures. Which one?.
- Over 10% of the families we’d spoken to rule out divorce or separation, simply for financial reasons.
- A third of the families we spoke to, which were in receipt of child maintenance, are actually depending on that money to make ends meet.
- And one type of family in particular has learned that previous first-hand experience is what really matters, when there’s a need to minimise arguments about money in the family environment today. Which one?