Britain could face new ‘winter of discontent’, finance experts warn
The report highlighted rising levels of personal debt and higher inflation’s impact on real pay as strains on family budgets.
Britain could face a new “winter of discontent” as hard-pressed families count the cost of almost a decade of lost growth, the authors of a study into financial inclusion have warned.
The University of Birmingham’s 2017 Financial Inclusion Annual Monitoring Report identified a sharp rise in the number of people who said they would be unable to find £200 to meet a one-off expense.
The study, released by the university’s School of Social Policy, also found that almost half of those surveyed (46%) believed the outcome of June’s General Election would make their household’s economic situation worse.
While 35% believed the result of the poll would make no difference to their financial fortunes, just 6% thought they would benefit over the next 12 months.
Although the report noted several positive trends, including falls in unemployment, insolvencies and mortgage possessions, it highlighted rising levels of personal debt and higher inflation’s impact on real pay as strains on family budgets.
The report’s co-author Professor Karen Rowlingson, of the University of Birmingham’s Centre on Household Assets and Savings Management, said: “Things have definitely got tougher.
“Five years ago the situation was improving for some people, but in the past two or three years, as we can see from all sorts of data, things have clearly taken a turn for the worse.
“Unless things change, the outlook for a lot of people appears very challenging, so much so that we could be about to enter a new winter of discontent.”
Professor Rowlingson also warned that the universal credit system of benefit payments could prove “catastrophic” to debt levels if implemented as planned.
She said: “We can clearly see from the latest available data that the people at the bottom are being pushed further down, and benefit changes are only likely to make that even worse.”
Among statistics cited in the report are figures from the Trussell Trust, which provided three-day emergency food and support to more than 1.2 million people in 2016/17, compared to 61,000 in 2010/11.
The authors of the report are calling for the new Parliamentary Under-Secretary of State for Pensions and Financial Inclusion, Guy Opperman, to formulate a new strategy to improve levels of financial inclusion.
They argue that this should be in line with the recommendations of the recent House of Lords Select Committee on Financial Exclusion.
The report’s co-author Professor Stephen McKay, a social research professor at the University of Lincoln, added: “The gap between the haves and the have-nots is growing.
“While those at the top have improved their position relative to others, we’re seeing a higher proportion of people struggling at the bottom and being squeezed in the middle.”
Responding to the report, a Treasury spokesperson said: “We realise some families are concerned about their daily cost of living.
“That is why we are helping them keep more of what they earn by cutting taxes for over 30 million people, raising the National Living Wage and introducing a cap on payday loans.”