One in three (33%) of us are spending more than our salary or are just about managing to break even each month, according to Bright Grey’s Financial Safety Net report, from a study carried out by Opinium Research. Evidence was gathered from interviews carried out online among 2,016 nationally representative British adults, between 31 January and 3 February 2012.

The study found that over 11 million British adults (23%) just about match their outgoings to their net monthly salary, with nothing left over at the end of the month. Worryingly, 4.9 million (10%) said that they spend more than their salary on a regular basis.

The concern identified by Bright Grey is that the findings show that the average consumer spending £1,315 a month, spends only £30 on protection insurance products towards providing a financial safety net.

This compares to £56 on telephone bills and a huge £232 on supermarket and other shopping. In terms of large ‘one-off’ products and services, adults in Britain spend an average of £885 on holidays a year, £214 on big ticket electrical goods such as TVs, cameras and iPods over the same period and £151 on white goods such as fridges and freezers.

According to the Safety Net Report, 41% of adults would be unable to maintain their current lifestyle beyond September 2012 if they had to live off any savings or ‘emergency’ funds, with respondents saying they would only be able to rely on savings, borrow from friends and family, or rely on credit, for up to six months in a financial emergency.

This number is five times greater than the figure identified in the 2010 Safety Net Report. Then, the findings indicated that just over 4 million adults would run out of money after 6 months. A typical adult in 2012 thinks they can use savings, loans or financial help from friends and family for an average of 290 days. This is a decrease of around a month from those that felt they could manage from savings and borrowing, a year ago.

The study also showed that nearly half (43%) of respondents say they have £1,000 or less in savings that they could access immediately, with nearly a quarter surveyed (23%) having no money saved at all. Should the main breadwinner be diagnosed with a serious illness, suffer a disability or die, 1 in 4 (24%) adults said that they would need to cut back drastically on their living costs in order to maintain their current standard of living. The same number (24%) said that they would not know what to do in this eventuality. Over 1 in 10 (11%) of those surveyed said they would have to sell their house.

If you would like to carry out a review of your protection arrangements, please do not hesitate to contact one of our consultants.