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Income gap between haves and have nots 'is widening' Income gap between haves and have nots 'is widening'
(about 4 hours later)
Family incomes have reached the highest level for three years, according to a report on family finances by Aviva which also warned that the gap between the haves and have nots is widening.Family incomes have reached the highest level for three years, according to a report on family finances by Aviva which also warned that the gap between the haves and have nots is widening.
The insurance company said that over last six months the typical family’s monthly income has climbed to £2,126, up 4.1%. Couples planning to have children have seen their incomes rise by the biggest amount, up £339 to £2,461.The insurance company said that over last six months the typical family’s monthly income has climbed to £2,126, up 4.1%. Couples planning to have children have seen their incomes rise by the biggest amount, up £339 to £2,461.
But single parents raising children alone – including those who are divorced, separated or widowed – have seen their income go into reverse. Aviva said they are having to cope on an average of £1,72 a month, compared to £1,408 six months ago. But single parents raising children alone – including those who are divorced, separated or widowed – have seen their income go into reverse. Aviva said they are having to cope on an average of £1,172 a month, compared to £1,408 six months ago.
It is important to address the fragile footing of some families, so they are not exposed if their circumstances changeIt is important to address the fragile footing of some families, so they are not exposed if their circumstances change
Many single parents are being forced to work part-time, said Aviva, as they cannot afford to pay for childcare.Many single parents are being forced to work part-time, said Aviva, as they cannot afford to pay for childcare.
In figures that appear to contradict the belief that middle class families are being squeezed financially, Aviva found that the proportion of families taking home at least £2,500 a month has risen from 39% to 43% in the last six months, while the percentage taking home £1,000 or less has stayed consistent at 10%.In figures that appear to contradict the belief that middle class families are being squeezed financially, Aviva found that the proportion of families taking home at least £2,500 a month has risen from 39% to 43% in the last six months, while the percentage taking home £1,000 or less has stayed consistent at 10%.
Many families are not managing to save each month, leaving them vulnerable to financial shocks – particularly as debts have also increased.Many families are not managing to save each month, leaving them vulnerable to financial shocks – particularly as debts have also increased.
Aviva’s Louise Colley said the report was great news for some British families, but made grim reading for others.Aviva’s Louise Colley said the report was great news for some British families, but made grim reading for others.
“The typical family has got more money in its budget and is using it to save more and reduce their financial vulnerability. However, we must not overlook the growing number of families in danger of being left behind by this resurgence. In particular, single parents face a challenge to maintain their standards of living on lower incomes and it is no wonder that many families are still finding it a struggle to put money away each month.”“The typical family has got more money in its budget and is using it to save more and reduce their financial vulnerability. However, we must not overlook the growing number of families in danger of being left behind by this resurgence. In particular, single parents face a challenge to maintain their standards of living on lower incomes and it is no wonder that many families are still finding it a struggle to put money away each month.”
She said it was a concern to see rising levels of debt that are requiring families to make ever-increasing monthly repayments. “It’s important to highlight and address the fragile footing of some British families so they are not left exposed if their circumstances should change.”She said it was a concern to see rising levels of debt that are requiring families to make ever-increasing monthly repayments. “It’s important to highlight and address the fragile footing of some British families so they are not left exposed if their circumstances should change.”
The report which uses the experience of over 26,000 people, found that a quarter of families (26%) are saving nothing each month, and the percentage with no savings cushion has remained static at 17% over the last six months.The report which uses the experience of over 26,000 people, found that a quarter of families (26%) are saving nothing each month, and the percentage with no savings cushion has remained static at 17% over the last six months.
Average non-mortgage debts rose by 5% to £9,520, suggesting some families are relying more heavily on borrowing to supplement their incomes.Average non-mortgage debts rose by 5% to £9,520, suggesting some families are relying more heavily on borrowing to supplement their incomes.
A spokesman for debt charity StepChange said the report painted a “worrying picture”.A spokesman for debt charity StepChange said the report painted a “worrying picture”.
“In recent years more and more people we have helped have been struggling with arrears on their essential household bills like their mortgage, rent, electricity and council tax. While rising wages will make a difference, it will take some time to make up for the last few years of below inflation wage increases and spiralling living costs.”“In recent years more and more people we have helped have been struggling with arrears on their essential household bills like their mortgage, rent, electricity and council tax. While rising wages will make a difference, it will take some time to make up for the last few years of below inflation wage increases and spiralling living costs.”