Bills warning as Britons struggle to cover monthly payments despite feeling ‘optimistic’ | Personal Finance | Finance

The nation is increasingly optimistic about its household finances ahead of the general election.

Some 61 percent feel more optimistic about their finances compared to this time last year.

At the same time 76 percent feel confident about being able to manage and pay their household bills in the coming months.

And almost half (47 percent) said they were ‘quite confident’ they will be able to do so.

Despite the improved optimism, the figures also reveal that almost half of Britons do not have enough income from their salaries or pensions alone to cover the monthly bills.

As a result, some 45 percent of people say they need to dip into their savings around three times each month to make ends meet.

The figures, which come from Compare the Market’s latest Household Financial Confidence Tracker, also found people are increasingly relying on credit cards to cover essentials.

It found that 27 percent are planning to use their credit card at least once a week and cut back on eating out (48 percent), buying clothes (42 percent) and going on holidays (36 percent).

The research found as many as 20 percent of people only managed to make the minimum repayment on their most recent credit card bill. And only 48 percent are regularly paying off their credit card balance in full each month.

In terms of summer travel plans, 41 percent can afford a holiday in the UK, while only one third (34 percent) are able to head to a European destination.

Andy Hancock, Chief Growth Officer at Compare the Market, said: “It is encouraging that people are seemingly confident about their ability to manage and pay their everyday bills in the summer months ahead, signalling a positive outlook on the consistency and reliability of their financial situations.

“However, our research shows that many people are still struggling to save on a monthly basis, and a significant number are having to rely on those savings each month to pay for everyday bills or lean on credit cards for additional costs such as holidays.

“Credit cards can be a valuable tool for making purchases, such a paying for holidays. However, when taking out a credit card you have to be mindful of not borrowing more than you can afford. It’s worthwhile paying off your credit card balance in full every month to avoid paying interest.

“Households can potentially benefit from shopping around to find a deal on credit cards and loans, as well as home and travel insurance policies in the summer months ahead.

“Understanding which available policies can save you money on everyday living costs can not only decrease those outgoing spends but also contribute to an individual’s monthly savings pot.”

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