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The Aviva FamilyFinances ReportAutumn - 2011
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The typical UK family
While 84% of the UK population lives as part of a family, theconcept of the traditional family is now outmoded. In its
Family Finances Report, Aviva recognises there are various
different types of modern families (see page two for groups
tracked) and looks at their individual approaches to finances
including wealth, debt and expenditure.
The Aviva Family Finances Report 2
In addition, this report looks at how families often find themselves supporting
members of their own extended family or friends, both financially and practically.
This generosity can have a negative impact on their finances, with just under half
saying it hampered their ability to save, and almost a quarter suggesting that it
made repaying debts more difficult. Pensions also suffer and Aviva has calculated
that over 40 years, each family could be giving away more than 70,000, almost
three times the typical pension pot at retirement.
Overview:
Income Incomes continue to fall as unemployment increases (pg 4).
Spending trends Families cut spending on luxuries as inflation bites (pg 7).
Wealth
Savings pots fall to 967 (982 - Aug 2011) as monthly savings hit lowest level
in 2011 (19 Nov) (pg 8).
Product mix Number of families with mortgages rises from 45% (Jan 2011) to 49%
(Nov 2011) as availability increases (pg 9).
Debt Typical family owes 10,604 or just under half of annual household income
(23,796 Nov 2011) (pg 11).
Look to the future Worries around the rising cost of living (61%) fall as consumers
acclimatise (pg 13).
Families pull together Almost a third (31%) provide financial support to their family
and friends (pg 14).
Families give away 2% of income Typical financial support to family and friends
amounts to 442 annually (pg 16).
Finances take a knock 46% said supporting family and friends meant they are less
able to save, 24% struggle to repay debts and 11% put less into their pension (pg 16).
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1. Living in a committed
relationship* with no plans
to have children
2. Living in a committed
relationship with plans
to have children
3. Living in a committed
relationship with one child
4. Living in a committed
relationship with two
or more children
5. Divorced/separated/widowed
with one or more child
6. Single parent raising one
or more child alone
* For the purposes of this report, a committed relationship is defined as either one where two people are married or living together.
The UK modern family
Thirty years ago, it was relatively safe to assume that a nuclear familyconsisted of two parents and one or more children. However, as society has
changed, this is no longer the case. In this report, Aviva looks to recognise
the most common types of modern family based on customer profiles and
Government data.
The Aviva Family Finances Report 3
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Average income continues to fall
The typical monthly net income of a UK family (i.e. the median family in the middle of the sample) is now 1,983 (Aug 2011
2,018) revealing a slight drop (two percent) on the figures recorded in the previous quarter.
The main driver behind this fall appears to be the six percent drop recorded among those living in a committed relationship with
one child. Their income fell from 2,327 (Aug 2011) to 2,196 (Nov 2011).
The summer Family Finances Report explored the impact that children especially young children can have on family incomes and
parents earning capacities - so this may well be a contributing factor to this drop.
% of people on different income levels over four quarters (2011)
All other groups also recorded lower incomes than the last quarter except for those in a committed relationship with no plans to
have children. These families actually saw an eight percent increase from 2,180 (Aug 2011) to 2,347 (Nov 2011). However, their
income is still lower than those in a committed relationship with plans to have children (2,402 Nov 2011).
It is interesting to note that these two groups have the highest number of people deriving income from a primary job i.e. full-
time employment held by the main breadwinner so any salary increases would be felt most prominently here. Indeed, 85% of
those in a committed relationship with plans to have children and 77% of those in a committed relationship with no plans to have
children have this type of income.
At the other end of the scale, the number of families who survive on less than 1,250 per month has increased slightly to 30% (Nov
2011) from 29% (Aug 2011) a worrying trend in the current high inflation environment.
Income
The Aviva Family Finances Report 4
750 or less 751-1,250 1,251-2,500 2,501-5,000 More than 5,001
Income level
Q1
Q2
Q3
Q4
0%
5%
10%
15%
20%
25%
30%
35%
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Income sources second / part-time jobs are significant as employment decreases
The most common source of income for the typical UK family is the primary income earners salary (70% - Nov 2011) although
this has dropped slightly since August 2011 (72%) as the UK experiences a 17-year high in unemployment.
While the number of families who derive income from the primary income earners job has fallen, those who see financial
contributions from part-time or second jobs has r isen from 16% (Aug 2011) to 18% (Nov 2011). Those who are married with two
or more children are most likely to have part-time or second jobs (22% - Nov 2011) which suggests that employment which fits
around family commitments continues to be in high demand.
Benefits contribute to the monthly income of more than one in five families and there has been a slight increase in the dependence
on this type of funding 21% (Aug 2011) to 23% (Nov 2011). This appears to support the theory that unemployment is affecting
some families, making them more reliant on the state.
Single parents (51% - Nov 2011) are most reliant on benefits for some or all of their familys income but this figure has dropped
from 56% (Aug 2011) potentially indicating that some of the Governments benefit reforms are having an impact.
Despite the low interest rate environment, six percent (Nov 2011) of families derive part of their income from savings or investments.
However, whether this is using the income or the capital itself is not clear. In addition to this, two percent of families say rental
income contributes to their familys finances a slight decrease from August 2011 (3%) but in keeping with the general trend seen
throughout 2011.
The Aviva Family Finances Report 5
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Average expenditure families maintain spending as inflation soars
At a glance, family expenditure appears to have remained relatively stable over the last quarter with housing (mortgage or rent)
remaining the largest single expenditure for most families (20% - Nov 2011).
There has been a very slight decrease in the amount spent on housing, quarter on quarter (21% - Aug 2011) but this may be due to
the increasing availability of good mortgage deals rather than any other factors.
Typical family expenditure:
Type of expenditure Average amount spent as % of monthly income
Jan 2011 May 2011 Aug 2011 Nov 2011
Housing (mortgage or rent) 20% 22% 21% 20%
Food 10% 11% 10% 10%
Debt repayment 8% 10% 9% 9%
Nursery care / out of school care 9% 10% 10% 9%
Fuel and light (e.g. gas and electricity bills) 6% 6% 5% 6%
Motoring 5% 6% 5% 5%
Entertainment, recreation and holidays 4% 5% 4% 3%
Public transport fares and other travel costs 4% 4% 4% 4%
Fees for childrens activities 4% 4% 3% 3%
Clothing and footwear 2% 3% 2% 2%
After housing, food (10% - Nov 2011) is the next largest expenditure for the average UK family and the percentage of income spent
on this has remained steady for much of 2011. Debt repayments (9% - Nov 2011) and nursery care / out of school care (9% - Nov
2011) also account for a significant percentage of many families outgoings.
It is surprising that the percentage of income spent on some household expenses has remained stable, considering that inflation on
some essential costs has risen significantly. Basics such as fuel and light (+18.8%), motoring (8.7%), public transport (8.5%) and
food (6.9%) have all seen considerable increases.
However, it appears that UK families are down-shifting their spending where at all possible. This hypothesis is born out by results
from value retailers such as Poundland (+26% in profits to year ending 27 March 2011) and Aldi (profit of 18.7m on sales of
2.1bn following a loss in 2010).
Not only are families down-shifting their spending but they are also cutting spending on non-essential purchases. For example,
spending on entertainment and holidays has fallen to the lowest level in 2011 during this quarter (3% - Nov 2011).
The Aviva Family Finances Report 6
Expenditure
This research clearly shows that UK families are working hard to maintain
their standard of living by down-shifting and economising where possible.
However, with significant inflation on some of the basic costs, we are
likely to see families cutting right down on non-essential spending.
Paul Goodwin, director of workplace savings, Aviva
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Spending trends:
In addition to tracking inflation and spending, this report also shows where UK families have stopped spending money. This provides
us with an excellent indication of both the essential fixed costs for families and also how peoples lifestyles are changing.
One fifth (21% - Nov 2011) of UK families claim they do not spend money on housing either due to owning their own home
outright, receiving accommodation through employment or being supported by the Government. This figure has remained relatively
static since August (20%) as this is an essential rather than an optional cost.
However, fewer families are spending money on luxuries. In November 2011, we saw the number of families who spend nothing
on personal goods increase to 19% (17% - Aug 2011), entertainment/recreation/holidays to 25% (21% - Aug 2011) and leisure
goods to 39% (36% - Aug 2011) - clearly a picture of a nation cutting back.
Percentage of families who spend money on this expense on a monthly basis:
Type of expenditure Aug 2011 Nov 2011
Housing (mortgage or rent) 80% 79%
Debt repayment 58% 52%
Entertainment, recreation and holidays 79% 75%
Public transport fares and other travel costs 70% 67%
Fees for childrens activities 49% 48%
Leisure goods 64% 61%
Eating-out and takeaways 82% 80%
The Aviva Family Finances Report 7
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Savings and investments savings fall slightly as families fight to keep pots stable
The mean average amount that families have in savings and investments (excluding pensions and property) rose to the highest level
seen in 2011 (19,803 Nov 2011). This is 26% higher than at the start of 2011 (15,766 Jan 2011) and a real indication that
some families are looking to safeguard their futures as much as possible. However, this saving comes at the expense of paying off
debts, and recently it was estimated that for every pound saved, just 10p of borrowing is repaid.
However, this sample is skewed by the four percent (Nov 2011) of people who have savings of more than 100,000. The typical
family (i.e. the family in the middle of the sample) has significantly fewer savings - 967 (Nov 2011) or just 49% of the average
monthly salary. This is a two percent drop from August (982) and seems to indicate that most families are fighting hard to keep
their savings at current levels.
Almost a third (30% - Nov 2011) of families claim to have nothing set aside in savings which is a slight improvement from August
(31%) but still above the record low set in May (28%). However, the typical amount families are saving has fallen to 19 per month
(Nov 2011) the lowest amount in 2011 and a clear indication that high inflation is starting to hit home.
Percentage of families saving nothing each month
The typical divorced/widowed/separated family unit with one or more children (0 Nov 2011) and single parents (0 Nov 2011)
continue to save nothing each month. These figures highlight the fact that while some people in this group are naturally saving
something each month, the vast majority are saving nothing at all.
More worrying still is the fact that womens typical monthly savings have fallen from 16 (Jan 2011) to 4 (Nov 2011) especially
when considering that mens savings have actually risen (39 Jan 2011 to 58 Nov 2011).
The number of families who say they dont save on a monthly basis has risen to 39% (Nov 2011) from 36% (Aug 2011). This is
below the annual record set in January (40%) but appears to highlight the fact that there is a set of hard core non-savers who are
either unwilling or unable to save.
The Aviva Family Finances Report 8
Family wealth
Type of family
%s
aving
nothing
Coupleswithout plans
to havechildren
Couples withplans to have
children
Couples withone child
Couples withtwo children
Single,raising one
or morechildren
Divorced/Separated/
Widowed withone or more
children
0
10
20
30
40
50
60
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Product mix basic accounts dominate asfamilies fail to diversify
The majority of UK families (82% - Nov 2011) have a basic bank/
building society savings account. However, as 30% of people claim
to have no savings at all, this does raise the question of how many
of these accounts are active and contain viable amounts of savings.
In addition to basic savings accounts, ISAs (36% - Nov
2011), premium bonds (23% - Nov 2011), stocks and shares
investments (15% - Nov 2011) and bonds (6% - Nov 2011) are
all used by families to build their assets.
Typically, the more sophisticated products are used by those who
have the highest incomes. For example, people in a committed
relationship who plan to have children (43% - Nov 2011) are
more likely than single parents (27% - Nov 2011) to have an ISA.
With more accessible first-time buyer mortgage deals entering
the market over the past year, we have seen increasing numbers
with this type of borrowing 45% (Jan 2011) to 49% (Nov
2011). The number of buy-to-let mortgages has also increased
marginally from 2% (Jan 2011) to 3% (Nov 2011).
Reviewing the product profile, it also appears that families are not
only trying to save in order to safeguard their futures, but are also
taking out protection products. The number of families with lifeinsurance has risen from 39% (Jan 2011) to 41% (Nov 2011) and
critical illness cover from 13% (Jan 2011) to 14% (Nov 2011).
The Aviva Family Finances Report 9
While this latest report shows that family finances are still tight, its reassuring to
see that more people are beginning to take steps to protect their families with life
insurance and critical illness cover. While there is still a significant protection gap across
the UK, this is a step in the right direction, and we would hope that more people will
follow this trend.
Louise Colley, head of protection, Aviva
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Number of families with mortgages increases
Over half of families (64% - Nov 2011) own their own homes either with a mortgage (50% - Nov 2011) or outright (14% - Nov
2011). In addition, 19% (Nov 2011) of families live in rental accommodation and 15% (Nov 2011) live in social housing.
While the number of people who own their properties outright has remained the same since the start of the year (14% - Jan 2011),
the percentage of families with mortgages has actually risen from 47% (Jan 2011) to 50% (Nov 2011). This appears to correspond
with a drop in the number of people living in rental accommodation 22% (Jan 2011) to 19% (Nov 2011).
This move has led to more families worried about mortgage rate increases - 14% in November 2011 compared to 13% in January 2011.
However, this is a very minor increase and a vote of confidence in the belief that the base rate will remain low for the foreseeable future.
The typical family home in the UK is worth 207,190. This is 25% higher than the average UK residential property (166,256)
reflecting the fact that this population group tends to need larger properties than single people. The value of the family home hasremained relatively stable since January (207,548).
Average value of house per demographic type
While prices have remained stable, the average amount of equity has fallen from 139,218 (Jan 2011) to 132,275 (Nov 2011),
and the average mortgage has increased from 89,018 (Jan 2011) to 95,466 (Nov 2011).
Single parents are most likely out of all the groups to be living with their families (4% - Nov 2011) or in social-housing (39% -
Nov 2011). In addition, they are the next most likely to live in private rental accommodation (29% - Nov 2011), after those with
plans to have children (33% - Nov 2011).
At the other end of the scale, those who live in a traditional nuclear family (i.e. in a committed relationship with two or more
children) are least likely to live in rental accommodation (11%) and most likely to own their own home (72% - Nov 2011).
In 2011, 15% of families claimed to own a second property either a rental property, holiday home, second home or time-share.
The average value of this property was 177,415 and the typical mortgage was 135,840.
The Aviva Family Finances Report 10
Housing wealth
Type of family
Value
ofproperty()
Coupleswithout plans
to havechildren
Couples withplans to have
children
Couples withone child
Couples withtwo children
Single,raising one
or morechildren
Divorced/Separated/
Widowed withone or more
children
0
50,000
100,000
150,000
200,000
250,000
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The Aviva Family Finances Report 11
Family borrowing
Debt amounts to nearly half of annual household income
As part of the final Family Finances Report for 2011, Aviva has taken a more in-depth look at the different
types of family debt. More than half of UK families (52% - Nov 2011) have some form of debt which they
repay on a monthly basis, down from 58% in August 2011.
The average indebted family owes 10,604 (Nov 2011) which is just under half of its annual household
income (23,796 Nov 2011)*.
Those in a committed relationship with two or more children (16,428 Nov 2011) have the highest debts
while those in a committed relationship with no plans to have children (3,577) have the lowest. As those in
relationships with two or more children tend to have the lowest household income (2,178 Nov 2011) of
all two-adult families, this perhaps suggests they are more likely to use credit to maintain their lifestyle than
some other groups. The most common type of family borrowing is using credit cards (43% - Nov 2011),
followed by overdrafts (26% - Nov 2011) and personal loans (25% - Nov 2011).
Household income compared with debt
* This is not possible to compare to the previous quarter due to changes in the reporting process but does reveal a significant debt burden.
Averagedebt
Averagemonthlyhouseholdincome
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
Type of family
Couples withoutplans to have
children
Couples withplans to have
children
Couples withone child
Couples withtwo children
Single, raisingone or more
children
Divorced/Separated/
Widowed withone or more
children
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The Aviva Family Finances Report 12
Debt is a normal part of many
families financial management
strategies and as long as people can
service their loans, they can serve them
well. However, minimum payments
need to be maintained, or people may
find that what seemed like sensible
borrowing could become an increasing
drain on their financial resources.
Paul Goodwin, director of workplace savings, Aviva
When the borrowing practices of the various families are
investigated further, it appears that single parents tend to use more
informal forms of borrowing. This group is the most likely to use
doorstep lenders (9% - Nov 2011) and other informal borrowing
(9% - Nov 2011) such as pay-day loans and pawn brokers.
The group most likely to use family or friend finance are those
in a committed relationship with plans to have children
(23% - Nov 2011) potentially because they are at the start
of their careers and likely to have received some help to attain
their financial goals.
Indebted families spend 224 (Nov 2011) on debt repaymenteach month which is up from the previous quarter (218 Aug
2011). Those in a committed relationship with two children
(254 - Nov 2011) spend the most and those widowed/
divorced/separated with children (162 - Nov 2011) spend
the least.
However, the amount of money borrowed does not appear to be
a big concern to most families. In January 2011, 13% of families
said it was a concern, but this had dipped to 11% in November.
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Short term fears about cost of living fall as worries about unexpected expenses rise
The top three biggest fears of UK families over the next three months are: increases in the basic cost of necessities (61% - Nov
2011), losing my/our jobs (45% - Nov 2011) and meeting unexpected expenses (42% - Nov 2011).
While consumers have learnt to live with the impact of high inflation and are marginally less worried about increases to the cost of
basic necessities (61% - Nov 2011 vs. 64% - Aug 2011), they are increasingly concerned about meeting unexpected expenses (42%
- Nov 2011 vs. 40% - Aug 2011). Low levels of saving, high levels of borrowing and the approach of winter and the festive season
are likely to be some of the drivers behind this move.
While 45% of families are worried about the loss of their jobs, a new category has revealed that 8% of families are concerned
about continued unemployment. Single parents who have the lowest incomes and are likely to feel inflationary pressure the most
are most worried about this prospect (19% - Nov 2011).
Long term concerns persist about the general economy
Significant increases to the basic cost of necessities (59% - Nov 2011), redundancy (52% - Nov 2011), and unexpected expenses
(40% - Nov 2011) remain the top worries for UK families for the next five years.
More than one in five (22% - Nov 2011) families has taken the Government warnings over cutbacks to heart and are worried aboutchanges or loss of benefits. This level has remained relatively constant during 2011 - January (22%), May (22%) and August (20%).
Single parents with one or more children (42% - Nov 2011) are the most worried about these potential changes as 51% (Nov 2011)
derive part of their income from this source.
While the high cost of living is certainly an issue for many families, the fact
that they appear less worried than before indicates that they may be starting to
acclimatise to todays economic environment.
Paul Goodwin, director of workplace savings, Aviva
The Aviva Family Finances Report 13
Look to the future
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The Aviva Family Finances Report 14
Spotlight families pull together
financially and materiallyAs the tough economic climate begins to bite, the Aviva Family
Finances Report has found that 31% of families have provided
financial support to family and friends outside their immediate
family in the last year. In addition, 34% have provided practical
assistance such as babysitting, cleaning or help with cooking.
Reciprocal support:
Divorced/separated/widowed people and single parents (both
49%) are the most likely to provide practical support for their
network of family and friends. While these groups are typically
less well-off than others, they are more likely to live closer to
their families and also may need to rely heavily on their network
of family and friends at times - so it may be that in turn they are
more likely to provide assistance to others.
In addition, single parents (45%) are also most likely to
provide financial assistance. At the other end of the scale,
committed couples with no plans to have children (18%)
and those with one child (25%) are the least likely to provide
financial assistance.
Taking time out:
Help with cooking, cleaning or baby-sitting (21%) are the most
common types of non-financial inter-family support, followedby lending people items to avoid the need to purchase (8%)
and letting people live in the family home (5%).
The most common types of financial support are providing
cash to help with day-to-day expenses (26%) and paying bills
on behalf of family members or friends (9%). Providing cash for
day-to-day expenses is either via a loan (10%) or more commonly
(16%) a gift, which shows how family and friend networks are
prepared to assist those who are finding times tough.
The Aviva Family Finances Report 14
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The Aviva Family Finances Report 15The Aviva Family Finances Report 15
Parental responsibility:
While inter-generational gifts are often discussed in the media with older parents supporting their children financially, this is not a
one-way street.
The most likely recipients of financial assistance from families interviewed for this report (whose heads are aged between 18 and 55)
are parents. This breaks down as: mother (10%) and father (7%). Children over 18 who do not live at home (7%) and sisters (5%)
are also likely recipients.
As family dynamics change and evolve, some people are more likely to financially support their friends (3%) than other members of
their extended family aunt (0.34% - Nov 2011) and uncle (0.34%). Again single parents (6%) are the most likely to provide some
type of financial support to close friends.
Financial assistance focuses on immediate family and friends:Regular contact or legal compulsion appears to be the driver behind the largest amounts of inter-family financial support be it
regular or on an ad hoc basis. Former partners receive the biggest annual pay-outs annually (1,447) followed by adult children
over-18 (1,278) and children under 18 (1,175) who are not living at home.
The importance of friendship and proximity is evident as close friends receive the next highest amount of financial assistance
(893 Nov 2011) from UK families. While UK families are more likely to help their parents than other relations, the amount
provided annually is still relatively modest mother (597) and father (588).
Triggers behind inter-family financing:
The main triggers behind this type of assistance are unexpected changes to financial circumstances (25%) and unexpected one-off
costs (21%). Help due to changes in employment (20%) or poor financial management (19%) were also cited as key reasons.
Providing assistance to family and friends who are unable to cope financially on their income is also a key reason behind giving
(16%). Women (18%) are more likely than men (13%) to provide this type of help.
Amountlent/given-
Children over 18 who
do not live at home
Children under 18 whodo not live at home
Mother
Brother
Close friends
Ex-partner
0 300 600 900 1200 1500
Typical amount provided annually by those who lend / give to family and friends
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The Aviva Family Finances Report 16
Some tough decisions:
While many people expect to provide some support to their extended network of family and friends, increasingly squeezed family
incomes make this hard. Indeed, 15% of families have made cut-backs in order that they can continue to provide assistance and
11% have been less able to support their extended family this year as they themselves are struggling.
Conversely, 10% report that they have had to provide more support than previously something that is sure to be felt keenly in
the current inflationary environment. Divorced/separated/widowed families with one or more children (13%) are most likely to have
experienced these increased requests.
Negative impact on family finances:
While it is often seen as a duty to help relations and friends if they need assistance, this can have a negative impact on a familys
own finances.
Families said that due to providing this type of support, they were less able to save (46%), repay debts (24%), put aside money for
their own children (14%) or invest in stocks and shares investments (14%).
Not only were their short-term financial plans compromised, but 11% said this familial support had limited their ability to invest in
their own pension and 10% said it had a negative impact on their property investment aspirations.
It is interesting to note that 18% of those in a committed relationship with two or more children said that supporting their family
had a detrimental impact on their pension provision. This may be because these families tend to be older and are more likely to be
focusing on this goal.
Lifetime impact:
While admittedly 442 (typical annual inter-family subsidy) does not sound a lot, this is two percent of annual household income
(23,796 Nov 2011) for a typical family rising to six percent of income (13,778) for divorced/widowed and separated parents.
Over 40 years this sum would provide a useful nest egg (17,680 excluding inflation and any interest). Indeed, this figure of
17,680 is two thirds (66%) of the typical UK pension pot (26,940 source ABI Q2 2011) which really highlights how familial
support can impact on peoples own futures.
Furthermore, over an average 40 year working life, this sum (if matched by an employer contribution in a typical workplace pension
scheme) would provide a valuable nest egg (71,757) and an income of over 3,000 per year*.
The Aviva Family Finances Report 16
* This assumes a 25-year old male on a salary of 25k saves 442pa in a pension until age 65 (matched by employer) and takes no tax free cash at retirement.
Source www.aviva-pensioncalculator co.uk
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The view acrossthe UK
Region% of people in the region
who are living in a committed
relationship and want children
% of people living in theregion living in a committed
relationship with one child
IncomeTypical
interfamily
debt
House
prices
1. East 10% 12% 1,994 498 225,5382. London 18% 21% 2,628 463 335,841
3. East Midlands 8% 16% 1,722 410 172,446
4. West Midlands 10% 23% 2,036 796 184,633
5. North East 11% 12% 1,713 299 154,365
6. North West 8% 16% 1,852 443 169,853
7. Scotland 9% 20% 2,004 420 163,235
8. South East 10% 13% 2,149 422 247,406
9. South West 9% 15% 1,862 388 207,222
10. Wales 15% 16% 1,249 408 165,313
11. Yorkshire 13% 9% 1,886 305 177,103
UK 11% 16% 1,983 442 207,190
The Aviva Family Finances Report 17
Regional overview incomes flat andsavings down, but families look to helpeach other financially
Families in London have the highest (median)
average monthly incomes (2,628), followed by
those in the South East (2,149). They also own
the most expensive properties (335,841 and
247,406 respectively).
However, families in London also have the highest amount
of debt too (23,609). At the other end of the scale, families in Wales have the
lowest average monthly incomes (1,249), but also the lowest amount of debt on
average (3,476) much lower than the national average of 10,604.
While the average income of UK families has dropped, some regions have
seen increases: London (up from 2,477 to 2,628), Scotland (up from
1,952 to 2,004), the South West (up from 1,796 to 1,862), South East
(1,894 to 1,994) and Yorkshire (up from 1,853 to 1,886).
Families in London currently save the most each month (58), whereas
families in the North West (average 1) save the least of those who
save. Half (50%) of families in the North East say they dont manage
to save anything each month, compared with just 27% of families in
London, 34% in the West Midlands and 35% of families in Scotland.
The cost of living has had a significant impact on families in London, where
42% say that in the last twelve months, they have provided financial
support to family members outside of their immediate family. Families
from the South West (27%) and from Yorkshire (27%) are the least likely
to have provided financial support to their wider families. Typical inter-family
debt stands at an average of 442; however families in the West Midlands have proved
most generous, having provided an average of 796 to their wider family.
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The Aviva Family Finances Report 18
The final Family Finances Report for 2011 shines a spotlight on a nation of families who are
actively cutting spending to the bone. People are ruthlessly removing luxuries from budgets in
order to not only make ends meet, but also to provide additional security in the form of savings
savings pots have increased 26% since January.
Unfortunately, while the number of people who are saving has improved slightly quarter on
quarter, the amount saved has actually fallen. This is unsurprising considering that essential costs
such as fuel and light (+18.8%), motoring (+8.7%) and food (+6.9%) have seen substantial
annual inflation.
Its perhaps to be expected that almost half of UK families provide close friends and relations
with practical or financial assistance, in addition to emotional support. However it is a shock that
people are giving up two percent of their annual household income on average and over 25
years 41% of a typical pension pot
Some people are legally bound to provide financial support to their ex-partners and others choose
to help their children who do not live at home. However, in this increasingly tough economic
climate, people may need to draw a line and consider their own financial wellbeing especially
when 19% of financial borrowing is due to the recipient having poor financial management.
Paul Goodwin, director of workplace savings, Aviva
So what does this tell us?
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The Aviva Family Finances Report 19
Methodology
The Aviva Family Finances Report was designed and produced by Wriglesworth Research. As part of this 8,097* UK
consumers aged between 18 and 55 who live as part of one of six family groups were interviewed by Opinion
Matters between December 2010 and October 2011. This data was combined with additional information from the
sources listed below and used to form the basis of the Aviva Family Finances Report.
Additional data sources include:
Unemployment Figures Office of National Statistics October 2011
Poundland and Aldi Results companies own reporting
Nationwide September House Price Figures
www.aviva-pensioncalculator.co.uk 31 October 2011
Unbiased Q2 savings vs. debt levels September 2011
Technical Notes
A median is described as the numeric value separating the upper half of a sample, a population, or a probability
distribution, from the lower half. Thus for this report, the median represents the family who is at the utter middle of
a sample.
An average or mean is a single value that is meant to typify a list of values. This is derived by adding all the values
on a list together and then dividing by the number of items on the said list. This can be skewed by particularly high
or low values.
For further Information on the report or for a comment, please contact Sarah Poulter at the Aviva Press Office on
01904 452828 or [email protected]
* = Minimum of 2,000 per quarter
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