Notice of defaults: everything you need to know
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Fewer middle income families can afford to buy their own home or get by without benefits.
A new report from the Institute of Fiscal Studies has outlined the challenges faced by middle income families across the UK. It seems there are fewer middle income families living in their own homes and more needing to rent instead. There’s also been a rise in the number of these families relying on state benefits to top up their income.
Let’s have a look at the report in more detail.
What did we learn from the report?
According to the report, more middle income families now look like the poor families of the past. Half of the middle 20% of families now rent, rather than own their own home. 20 years ago, 69% – well over half – were homeowners.
Middle income families with children now get just under a third of their income from benefits and tax credits – a 22% rise when compared with the figures 20 years ago.
The report also highlighted the growing importance of mothers’ wages. More than a quarter of the incomes of middle income families came from mothers in 2014-15, up from 20% in 1996. This supports research carried out by Debt Advisory Centre which found that 55% of women across all age groups are responsible for controlling the budget in their homes.
Interestingly there was a growth in income overall for the population in 2014-15. However this increase was due to the rise in income for the elderly – there was no increase for workers aged 31-59, and the incomes for workers aged 20-30 actually declined by 7%.
Even though employment rates are rising, the slow growth of wages, benefits cuts and rises in the general cost of living have hit some families hard. This report has shown us that the difference in wages between the employed and the unemployed has narrowed, giving rise to the idea of the ‘working poor.’ Shockingly, the report shows that a massive two thirds of children considered to be living below the poverty line have at least one working parent.
Help for families who are struggling
If you’re working but still struggling to make ends meet, there might be help available. You should make sure that you’re receiving all the benefits you’re entitled to as topping up your income in this way might make all the difference. Find out what’s available and whether you’re eligible here.
It may be that you’re able to free up more money by careful budgeting. You should always make sure that you have enough money to cover your priority payments first and foremost. Your rent, utility bills and council tax are all classed as priority payments because the consequences of missing these payments will be worse than missing unsecured payments, like repaying a credit card for example. For a more detailed look at which payments you should put first, have a look at our blog on priority and non-priority debts.
There is always a solution if debts are making things difficult for you and your family. Our page will give you an overview of the different ones available and how they can help. Each solution has its own upsides and downsides so the best way to find the right one is to speak to a trained debt advisor.
You can speak to one of our advisors using any of the options on the left and the initial advice we give is always free of charge. There’s also lots of information about debt solutions and benefits available from the Money Advice Service which is free and impartial.
by Christine WalshBack to blog home