New research from Aldermore has revealed that 9.3 million UK adults are unaware of how much they spend on essentials such as mortgage payments and childcare, according to its latest Savings Tracker.
One in five (22%) UK adults admit they avoid looking at their bank balance due to financial anxiety. This problem is particularly acute among younger generations, with two in five (43%) of ‘Gen Z’ savers and 35% of Millennials struggling to face their financial situation. By contrast, only 14% of Gen X and 5% of Baby Boomers adopt this avoidance strategy.
Financial blind spots and hidden costs
The research highlights worrying gaps in financial awareness, some of which are the most expensive outlays Brits will have, including their mortgage/rent payments (15%), insurance premiums (19%)3 (30%) and even utility payments (9%).
Certain luxuries such as TV packages (16%), gym memberships (28%) and online TV subscription services (13%) are also unaccounted for.
One in ten (11%) of those who avoided reviewing their spending saved less than £100 over the last year.
Rising overdrafts and eroding savings
With these expenses unaccounted for, many are dipping into their savings to cover monthly costs. In the last year, over three in five (62%) Brits admit to dipping into their savings within the last year with nearly a third (29%) doing so in the last month.
Meanwhile, one in three UK adults (36%) admit to going into their overdraft. Over one in ten (13%) do so occasionally, yet concerningly nearly one in ten (7%) always need to go into their overdraft constantly, highlighting how finances aren’t stretching far enough for some.
Alex Myers, head of savings, Aldermore said: “Our research shows that many UK adults are flying blind when it comes to their essential spending. This data is a wake-up call – if you’re not tracking your expenses, you risk falling into a cycle of debt and diminishing your savings. The solution isn’t about cutting back drastically, but rather about taking small, consistent steps to understand and manage your money better.”
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