- 16
- Jul
Excessive spending on luxury goods and services could see many Britons develop debt management problems in later life, it has been suggested.
According to research carried out by Fidelity International, just under half of those adults without any savings (45 per cent) claim to be unable to put any money away for their retirement. However, findings from the financial services firm also indicated that the average household spends some £1,180 on clothes and £1,908 on restaurants and hotels every year. Meanwhile, servicing debts accrued on personal loans and other forms of borrowing was reported to account for £3,542.
Consumers were also reported to be “living for today at the expense of tomorrow” via spending £769 annually on alcohol. Expenditure on cosmetic surgery was said to amount to £1.8 million everyday.
Commenting on the figures, Simon Fraser, president of institutional business for Fidelity International, said: “It all comes down to choices: live for the now and cope with old age poverty when it hits or make a few lifestyle tweaks based on the possibility of living until we are 100. Purchases of designer brand watches recently exceeded Maxi ISAs and it seems many are choosing to emulate the lifestyle of rich celebrities like David and Victoria Beckham even though we won’t be able to retire like them.”
With current levels of spending, the proportion of their annual income Britons are reported to be putting into saving schemes for later life is said to contrast “starkly”. Findings from the company indicated that if a 30-year-old man saves about £60 into his company pension every month, by the time he retires at the age of 65 he could have total savings of just over £126,000. However, if such a person was to carry on to “fund a celebrity lifestyle” after retirement they may find themselves with an average annual income of £5,841 which in turn could leave him financially “disappointed”. Fidelity International also indicated that consumers could be set to face further pressure on their finances in later life as rising life expectancy means that those in their 30s have more chance of living to 100 than dying before reaching 65.
In related news, a Scottish Widows study revealed that consumers could be putting their financial future at risk by spending thousands of pounds on clothes they never wear. Statistics released by the financial services provider last month showed that expenditure on unused items accounts for some £6,241 over the course of the average man’s life, with women said to be wasting £5,846. Meanwhile, 18-to-34 year olds are said to hoard about £90 worth of clothes every year.
About two-thirds of Britons (60 per cent) were said to have lied about how much they had spent on clothes to their family and friends. However, customer and brand marketing director Mike Hoban claimed that by cutting down on such “non-essential purchases” Britons could put extra cash into savings and retirement schemes to secure their financial future in later life, thus helping them to “save lots of money in the process”.
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