More than a third of people would be unable to find £200 at short notice, new research shows.

Twenty-two per cent admit they would have to borrow the money or sell a personal possession to fund such a one-off expense, with a further 12% saying they simply could not pay, according to data published in an annual financial-state-of-the-nation report by academics.

The figure is up from last year, when 24% of people said they would be unable to find the £200.

The latest Financial Inclusion report from the University of Birmingham, released today (14 October), finds that while there are some ‘positive signs’ for people’s personal finances, the majority of the population is still cutting back on spending – and those at the bottom are struggling ever more.

Among the findings in this year’s report, which is based on the most up-to-date available data, are:

  • Thirty-five per cent of people are still finding it difficult to cope financially or are only just getting by – a slight decrease year-on-year.
  • There has been a dramatic increase in the number of people using food banks, from just over 61,000 in 2010/11 to more than 1 million in 2014/15.
  • The majority of the population (53%) is still reducing its spending, with one in 20 cutting back on basic food items.
  • Means-tested benefits for an out-of-work single person in 2015 only provide 40% of the income they would need for an acceptable standard of living (57% for a single parent with one child or a couple with two children).
  • There were 1.85 million people out of work in the UK at the end of 2014 – close to pre-recession levels.
  • Sixty per cent of households have some form of unsecured credit.
  • Evictions from rented properties have increased, particularly in the social rented sector.
  • The number of people able to save money has gone up slightly.

The report says: ‘This report shows some positive signs compared with last year. For example, unemployment has fallen and some groups in the population have increased their savings and have more of a financial cushion to draw on in times of need. The number of people with access to bank accounts has increased, and the government has regulated high-cost, short-term credit more closely while at the same time providing some funding for credit unions to provide more affordable loans. Insolvencies have fallen, as have mortgage possessions.

‘Other signs are less positive, however. Wages are still not increasing, and benefit cuts continue. The majority of the population is still having to cut back on spending, and, for some, debt is increasing and it is difficult to afford even the basics. There is also evidence that landlord repossessions have increased for those in rented accommodation.

‘It therefore looks as though the experience of the recovery is very unequal. Some at the top are benefiting from economic growth while many at the bottom are struggling ever more.’

Report author Karen Rowlingson, Professor of Social Policy at the University of Birmingham, said: ‘The economy is slowly recovering from the great shock it suffered in 2008, and life is getting easier for some people.

‘However, the welfare cuts from 2010 onwards are starting to bite, which we can see in various indicators – not least the increase in possession orders granted to landlords, from 95,000 in 2010 to more than 120,000 in 2014.

‘An increasing number of people are at risk of losing the roof over their heads.’

Co-author Stephen McKay, Distinguished Professor of Social Research at the University of Lincoln, added: ‘The picture this year is quite mixed, with both positive and negative features identifiable in the current data.

‘Whilst a continuing recovery bodes well for future years, some groups remain under considerable pressure – and that pressure can only worsen when anticipated reductions in tax credits take place in 2016.’


For more information or to arrange an interview, contact Stuart Gillespie in the University of Birmingham press office on 0121 414 9041.

Notes to editors

  • The Financial Inclusion Annual Monitoring Report 2015 is the third in a series of five annual reports on financial inclusion from the University of Birmingham. A copy of the full report can be found online
  • The study was carried out by Professor Karen Rowlingson (Professor of Social Policy, University of Birmingham) and Professor Stephen McKay (Distinguished Professor of Social Research, University of Lincoln).
  • The research was funded by the Friends Provident Foundation and was carried out in three main stages: stakeholder engagement; secondary analysis of existing data sources; and a module of questions on an Ipsos/MORI omnibus survey. You can follow the Foundation on Twitter @FProvFoundation