Consumer pessimism about personal finances

New research from insurance and asset management company AXA indicates the UK is feeling pretty gloomy about their personal finances at the moment. One in 10 doesn't know when they will be able to earn enough to cover their outgoings every month, meaning they could be faced with growing debts.

According to AXA's "Big Money Index", only 16% are feeling positive about the next three months. That feeling of helplessness is shared among 'nest builders' (young families with a mortgage) and 'under-funded seniors' (retired people on benefits). Only 2% of retired people reliant on the state said their financial situation had improved in the last three months.

A worrying 8% of people are even avoiding opening their bank statements, or checking their balance, and run the risk of getting into debt problems.

As a result of uncertainty about the future, many people are reining in their spending and can't afford to save as much. 18% (nearly one in five) has stopped putting money into savings and 35% aren't putting anything away for retirement because of other financial commitments.

Almost one in four are socialising less and spending less on their friends and family and more people are buying non-branded goods.

In the third quarter of this year, people spent more clearing their credit cards and loans, although 19% of people were borrowing on an overdraft to cover their expenses.

A spokesperson for debt management company Gregory Pennington commented: "Sometimes reining in spending on non-essentials is all it takes to avoid a debt problem, but for some people this isn't enough. We advise anyone relying on an overdraft to pay bills to seek debt advice, as eventually that overdraft could reach its limit. Anyone who is struggling to afford their debt repayments should speak to a debt expert."