January 25 2015 Latest news:
Monday, June 23, 2014
Workers fork out more than £2,500 a year typically for small purchases such as coffees, breakfast, lunch and snacks, according to a new report.
Fears about appearing “stingy” in front of friends and family are helping to plunge people into over £1,000 worth of debt which is purely related to their social lives, research by a Government-backed body has found.
Nearly half (48%) of people surveyed by the Money Advice Service (MAS) admitted to falling into debt because of their social habits, with the average amount of “social debt” put at £1,260.
The MAS estimates from its findings that people are typically spending £341 a year just to avoid looking “tight” or “stingy”.
One third (32%) of the 3,000 people surveyed from across the UK admitted this concern helped to drive them towards over-spending while out socialising.
One quarter (25%) of people said they go out for meals that they cannot really afford because they do not like to say “no” to a night out.
People living in London were found to have the biggest typical social spending-related debt, at £1,570, followed by those living in the North East, at £1,454.
In Scotland, the average figure was £1,013, in Northern Ireland it was £1,052 and Wales it was £1,151.
The MAS, an independent body set up by Government to offer money tips, said the fears about social stigma could be well-founded, with 35% of those surveyed thinking that people who fail to get their round of drinks in at the pub are stingy and over a third (34%) feeling they are rude.
But those who do over-spend socially often face an unpleasant financial hangover, with one in five (20%) saying they had been forced to cut back on food as a result, and one in 11 (9%) not being able to pay their utility bills.
Jayne Symonds, a money expert at MAS, said: “I’d urge anyone in debt, due to their social spending, to take action now to avoid getting any further into the red and instead work at clearing it.
“You’d be surprised how empowering saying ‘no’ can feel when you see how healthy your bank balance looks.”
The research for Visa Contactless found that on average, the amount that people who travel to work spend on these small and regular purchases adds up to £10.59 a day.
Over the course of a year, taking weekends and holidays out of the equation, the total bill comes to £2,541, the Working Day Spend Report found.
Despite the significant annual sum, around a third of people said they do not factor this spending into their everyday budgets. The survey of more than 2,100 commuters from across the UK found they will typically spend £3.69 on a lunch, £2.09 on hot drinks and £7.09 when popping out to the shops during a break to stock up on food and drink for later in the evening.
As people did not necessarily buy all these items during each working day, for example some people may have bought food but no hot drinks, the average amount they spend on a daily basis of £10.59 is a combined average of the total amount people said they spent in each category.
There were also variations across the UK as to whether people turned to cash or cards to make small payments. Just over half (55%) of London workers said they use cash to buy lunch, compared with 81% of those working in Glasgow.
The rise in contactless technology, which allows people to make small payments by swiping a reader with their card, means more than 300,000 terminals across the UK now accept such payments.
People can make payments of up to £20 with this “tap and go” technology without having to enter their PIN.
Aviva will embark on a cost-cutting drive leading to 1,500 job losses if its £5.6bn takeover of Friends Life wins the backing of shareholders.