South East: One in four are payday spenders, KPMG report shows

Nearly a quarter (23%) of people in the South East spend more than half (51% to 100%) of their income the day* they receive it, according to findings from KPMG, as concerns are raised over reliance on credit payments.

The UK-wide consumer survey, conducted by YouGov, revealed that joint with the East of England, the South East is the country’s second biggest payday spending region, beaten only by people in the West Midlands (26%). By contrast, just 12% of Scots spend more than half their wages the day they come in.

The survey also revealed that for those in the South East, the most significant expenses on payday are utility bills (54% of respondents), housing costs (52%) and grocery shopping (37%). More than a third (36%) of those in the region also focus on paying off credit card bills and a significant proportion (14%) were found to be paying off loans and other unsecured debt within 24 hours being paid.

Across the UK, more than one in five (22%) 25-34 year olds spend 60-100+% of their pay as soon as they get it, with three percent finding themselves in the red by the end of the day. Conversely, just 8% of over 55 year olds see more than 60% of their income leave their account on payday.

The findings tally with the recent FCA study which found 13% of 25-34 year olds are in financial difficulty, having missed paying domestic bills or credit payments in three or more of the last six months.

Tim Rush, head of KPMG in the South East, said: “It’s not surprising that the majority of payday spending goes towards household running costs, be it utility bills, mortgage payments or rent. What is concerning is the relatively high number of people in the region who are spending significant amounts paying off unsecured debt and credit cards.

“The trend is by no means specific to the South East, with many people across the UK – particularly young people – forced to rely on credit throughout the rest of the month. It is becoming more common to slip into your overdraft on a regular basis, with the FCA revealing 11% of millennials in the UK have exceeded their overdraft limit or used an unauthorised overdraft in the last year.

“This can leave people vulnerable to unexpected costs, such as a car breaking down, forcing them to further rely on credit or loans. For people routinely relying on overdrafts or loans, we need to consider what else can be done to help them reconsider their financial habits.”