Looking at the breakdown of where the monthly pay check goes, for the majority of UK households much of the salary was already committed on pay day. On average, mortgages and rent accounted for around 20% of the monthly pay check, with 9% going on loan commitments and 6% to service credit cards.
Following the rise in prices in recent months, food accounted for 20% of the monthly pay check, whilst heating and utilities stood at 18%.
Set against these commitments, on average only 7% of the average monthly pay check went into savings or investments and the average worker had around 12% of their take-home pay left to allocate for disposable income.
The research, which is part of a new insight series from elephant, suggests many people are not saving enough and the relative proportion of income free as disposable income is a useful way to assess how much financial bandwidth families have to cope with rising living costs. The data also suggested that, by age group, those typically with young families have the least proportion of money available as disposable income.
elephant will be running insight sessions on the full research through February and March. Do drop us a line if you would like a free session.