The UK is catching up with America in spending beyond its means and using overdrafts and credit cards to pay for it, according to new research from Cahoot. Indeed, the Internet bank's Lifestyle Index report shows that 59% of people spend more than they earn; 51% in some months and 8% every month.
In order to finance that overspending, people are more likely to borrow money on a credit card (49%) or an overdraft (48%) to finance their overspending rather than dip into savings (38%), if they have any. 11% would borrow from family or friends and 5% would use a store card.
A third of people's disposable income is spent on non-essentials, with most money being spent on meals out, takeaways, clothes, magazines and books. A further 10% is spent on luxury items, the most common of which are mini-breaks and electrical gadgets.
Lifestyle Index found evidence however that a significant number of people would welcome some help in staying in touch with their spending. 24% of people who overspend would find it 'fairly helpful' if they were to receive a message from their bank to remind them of their spending. A further 17% said that they would find it 'very helpful'.
Source: Cahoot
