The Money Charity have released their debt statistics for August 2023.
Remember that you can view the statistics from last month here in order to compare with the August 2023 debt statistics.
Despite the Bank of England raising interest rates to 5.25% earlier this month (which is at the highest level since the 2008 financial crash), it seems that there could be some relief on the horizon. Over several months, pay growth rates have failed to keep up with inflation which have led to real term pay cuts for many UK workers.
The statistics from The Money Charity this month have highlighted that there are small but significant increase in real terms pay growth. In the three months to June 2023, regular pay increased by 7.8% on the previous year which is the highest annual growth rate since records began in 2001. Pay including bonuses rose by 0.5% with average annual pay increasing to £31,964. This may seem great but it does come with a caveat.
Pay growth has been lower than inflation therefore total real pay was actually below the pre-financial crash peak in February 2008. Currently these slight increases whilst positive, may not be felt so positively in our pockets in the short term due to the ongoing cost of living crisis.
A surprising turn of events due to the current climate is that research has suggested that workers’ ability to save has improved, thus improving their Financial Resilience. 65% of UK adults have reported that they have been putting money into savings over the past six months, with the younger age group of 18-24 year olds purposefully putting money aside.
Overall we need to be honest with you – this is a very small positive to look upon. There was a lot of other evidence within the August statistics that showed the UK population are still really struggling with other aspects of their financial lives. Plus, whilst the increase in pay is great, this does not apply to everyone. It is telling that 2,580 Consumer County Court Judgements (CCJs) were issued every day in England and consumer credit increased by 5.97% in the year to June 2023.
If the past year has had a negative impact on your financial situation, or you are facing increasing debt costs over the next few months, feel free to call us for a discussion on what debt solutions could be available to suit your personal situation.