Despite inflation being incredibly high across the world, unemployment is at record lows in many countries, illustrating the extreme supply pressures that are driving up costs. Despite low unemployment levels, concerns persist about the quality of the jobs people have, and particularly their ability to meet the rising cost of living.
Research from the University of Birmingham highlights how the security and level of income among people drives financial inclusion, leaving those with low incomes with little capacity to weather the cost-of-living crisis.
Inclusive society
The report highlights the challenges currently facing households as they struggle to cope with rising inflation. This has resulted in 40% of people saying that they’re either finding things difficult or just about getting by. What’s more, 62% say that they’ve cut back on heating to save money, with over half cutting back on lights and other appliances to save electricity.
“The key message from this 10-year study is to reaffirm the important point that the level and security of someone’s income is key, and simply giving people access to financial services solves nothing if they lack the financial ability to make good use of them,” the researchers explain.
This financial hardship is having a profound impact on our health, with 81% saying that their physical and/or mental health was being affected, with over half saying their relationships were also suffering.
The report reveals that while more people have access to bank accounts than ever before, the remaining unbanked population continues to face significant problems in a society that is increasingly cashless.
“With the current cost-of-living crisis, too many people in the U.K. are unable to manage day-to-day, meet one-off expenses and avoid problem debt,” the researchers conclude. “Household income is being stretched in all directions, and given the challenges faced in recent years, people are simply worn down by uncertainty. It is our hope that policymakers will use our findings to drive through changes that will support vulnerable people today, and rebuild their resilience for a more positive future.”
