How the UK borrows, spends and saves

How the UK borrows, spends and saves

Over the past 6 months, the number of people waiting for early access to Creditspring has grown by well over 10x. As part of our mission to make credit safer, simpler and cheaper, we wanted to ask our community a little bit about their finances. We wanted to make sure some of our key assumptions were right, and check that we understood the people we’re building a product for.

In March, we surveyed hundreds of people from across the UK about their savings. We also asked them about how they feel towards credit, and how much they’ve borrowed over the past year. We had responses from Manchester to Medway, and Aberdeen to Anglesea, from a range of different backgrounds and incomes.

We thought we’d share some of the most interesting findings below. Our sample size is still reasonably small, and has fewer high-income individuals than the general population.


Nearly 50% of people have less than £50 left before payday


Figure 1: How much money do you have left in your bank account before you get paid?


Approximately half of the people we surveyed reach payday with less than £50 in their bank account. Having such a small amount of disposable income makes it very difficult to save money, which makes dealing with things like unexpected expenses much harder. 20% of people we surveyed need to go into their overdraft before payday arrives.



55% of people have less than £100 in savings


Figure 2: How much money do you have in savings?

Research conducted by the Money Advice Service in 2016 showed that roughly 40% of people in the UK have less than £100 in savings. Our survey shows an even more shocking statistic, with more than half of people having less than £100 in savings (55%). Approximately 3 in 4 people we surveyed have under £500 in savings.



Credit cards are the most popular way to borrow money


Figure 3: What credit products have you applied for in the past twelve months?

Half of the people who responded to our survey applied for a credit card in the past 12 months. Personal loans were almost as popular. According to our survey, only around 1 in 10 people didn’t apply for any form of credit in the past 12 months. Arranged overdrafts were the least popular category, with ‘Other’ including things such as mortgages or car finance plans.



People typically borrow £500 in a year


Figure 4: What is the total amount of money you’ve borrowed in the past 12 months?

The amount people chose to borrow at any point over the past 12 months is much more evenly distributed. 35% of people borrowed an amount under £500, with around half of people borrowing less than £1,000. There’s a notable spike in the number of people borrowing over £5,000. We aren’t sure why this is the case – perhaps it’s something to do with excessive credit card debt. It’s worth noting that volunteers were asked to only include amounts they’ve borrowed on credit cards, overdrafts or personal loans.



What does it all mean?


There’s plenty of room to dig further into the data we collected. The results we got broadly showed what we were expecting: people typically borrow much more than they save (in small amounts), and more than half of the UK would need to borrow money in order to cover an unexpected expense of more than £250.

We were surprised to see that our results showed such a large proportion of people with little to no savings. This could be the result of unintentional bias in the people we surveyed, or a suggestion that the savings crisis in the UK is getting worse.