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 You aren't alone in your debt

Personal debt in the UK has been steadily rising, reflecting broader economic challenges and individual financial pressures.

By the end of May 2024, UK residents collectively owed a staggering £1,852.5 billion in debt.

This marked an increase of £205 million compared to May 2023, adding an extra £275.94 of debt per adult. These figures highlight that personal debt in the UK is a growing concern for individual and households.

On a per-household basis, the average debt, including mortgages, stood at £65,239. So, for adults, the average debt was £34,537—an amount that is approximately 96% of the average annual income in the UK. This means that the typical adult in the UK owes nearly as much as they earn in a year, creating a cycle of debt that is almost impossible to break.

 

The Main Causes of Debt

Credit card debt is one of the most common forms of personal debt in the UK.

In 2023, it was reported that 43% of UK households were dealing with credit card debt.

Credit cards can be a convenient financial tool, allowing consumers to make purchases and manage cash flow. However, they also come with risks, particularly when not managed properly. High interest rates on unpaid balances can quickly escalate the amount owed, leading to a cycle of debt that is difficult to break.

Overdraft debt is another significant issue, with 22% of UK households facing this type of debt, according to Equifax. Overdrafts can provide short-term relief for those who need to cover expenses before their next pay check, but like credit cards, they can also lead to financial difficulties.

It's crucial for individuals to understand the risks associated with credit cards and overdrafts. Before taking on such debt, consumers should ensure they can afford the repayments and are aware of the potential consequences of missed payments or accruing high-interest debt.

 

Low income is a significant driver of debt in the UK. Many people find themselves bordering on the poverty line due to salaries that are too low to cover the rising cost of living. The situation has been exacerbated by soaring energy bills, which have forced some households to go without heating or electricity in an effort to save money. When income is insufficient to meet basic needs, individuals may resort to borrowing to cover essential expenses, leading to a cycle of debt that can be difficult to break.

For those struggling with low income, managing a budget becomes critically important. Careful planning, prioritizing essential expenses, and seeking assistance where available can help manage limited finances. There are several ways to manage a budget on a low income and despite the difficulties by creating healthy habits you can take back your finances.

 

Lifestyle transitions, such as changes in employment or relationships, can also lead to increased debt. For instance, moving from a two-income household to a single income, due to a separation or the loss of a job, can create financial friction. The sudden drop in household income may lead to difficulties in meeting existing financial commitments, forcing individuals to rely on credit to bridge the gap.

Similarly, changing jobs can bring new financial challenges. A job change might involve a change in salary, which could be lower than anticipated, or new expenses such as commuting costs or relocation. If not properly planned for, these transitions can result in unexpected debt.

 

Entrepreneurship can be a rewarding path, but it also comes with significant financial risks.

According to Experian, 50% of new businesses in the UK close within the first three years.

For many entrepreneurs, starting a business often involves taking on personal debt, whether through loans, credit cards, or dipping into personal savings. When a business fails, the debts incurred can remain, leaving the individual with substantial financial liabilities. When taking on a business loan it is important to weigh the risks.

The high failure rate of new businesses means that many entrepreneurs find themselves burdened with debt long after their ventures have ceased operations. This can have a lasting impact on their personal finances, potentially leading to further borrowing to manage the debt, which in turn can exacerbate their financial difficulties.

 

The Broader Impact of Personal Debt

The rising levels of personal debt in the UK have broader implications for both individuals and the economy. High levels of debt can lead to financial stress, affecting mental health and overall well-being. For households with significant debt, the burden of repayments can limit their ability to save, invest, or spend on necessities, which can have a ripple effect on the economy.

Moreover, as interest rates rise, the cost of servicing debt becomes more expensive, further squeezing household budgets. This can lead to a situation where individuals are only able to make minimum payments on their debt, prolonging the repayment period and increasing the total amount paid over time. You could qualify for debt relief which can significantly relieve the burden.

For those facing overwhelming debt, it is important to seek help early. Debt counselling services and financial advisors can provide guidance on managing debt, creating a budget, and exploring options such as debt consolidation or repayment plans. Taking proactive steps can help prevent debt from spiralling out of control and provide a path toward financial stability.

 

Costs and Coverage explained

Buying a home is one of the biggest and most significant investments you’ll make and taking out home insurance provides a safety net against a range of risks which could be out of your control and otherwise leave you facing our-of-pocket expenses.

As of 2024 there are around 35 million home insurance policies in the UK and the number of policies is increasing each year, showing more people seeing the importance of having a policy.

 

The Importance of Home Insurance

First and foremost, home insurance offers peace of mind. Life is unpredictable, and unforeseen events such as fires, storms, theft, or accidents can happen when you least expect them. Without insurance, the financial burden of repairing or rebuilding your home, replacing your belongings, or dealing with legal liabilities could be overwhelming. Home insurance ensures that, in the event of a disaster, you won’t be left shouldering the full cost on your own.

Additionally, most mortgage lenders require borrowers to have home insurance as a condition of the loan. This requirement protects the lender’s investment in the property, as well as your own. Even if you own your home outright, it’s wise to maintain insurance coverage to protect your assets and ensure your home can be repaired or rebuilt in the event of a disaster.

 

 

What Does Home Insurance Cover?

Home insurance policies typically cover three main areas:

 

How Much Does Home Insurance Cost?

The cost of home insurance varies widely based on several factors, including the location of your home, its value, the materials used in its construction, and your policy’s coverage limits and deductibles.

Go. Compare data shows the price of Home Insurance has been increasing and the median cost of a combined home insurance policy is £212 – up 31% from Q1 2023 when costs were £162.

Costs for buildings only policies have also risen in 2024 by 4.4%, however contents-only premiums have reduced with median prices falling by 4% from £67 to £63 at the start of 2024.

While it may seem like a significant expense, home insurance is a crucial investment in your financial security. By paying a relatively small annual premium, you can protect yourself from potentially devastating financial losses, ensuring that your home and belongings are safeguarded against the unexpected.

 

Inflation has risen to 2.2%

 

For the first time since December 2023 Inflation has risen, reaching 2.2%. This comes after a positive year of decline as it got as low as 2% in June and held steady.

 

This increase was expected and a further one is expected later in the year before the rate begins to decline again. The Bank of England expects it to rise as much as to 2.75% before beginning to fall.

The rise is reported to be due the costs of electricity and gas not falling as quickly as they did a year ago.

 

The Bank of England

The money markets believe there is a 45% chance that the Bank Rate will be cut to 4.75% next month falling from its current rate of 5%. As well as a 55% chance that borrowing costs will remain the same.

 

The Mortgage-to-salary ratio

When buying a home lenders will consider your overall finances including any debt, your credit score, current salary and security before determining how much they are willing to lend. This benchmark is typically set at 4.5 times a borrower’s salary, this ensures that homeowners can manage their repayments without a heavy financial strain.

This ratio can vary significantly depending on various factors including your specific circumstances as well as the location of the property. Mojo Mortgages have found that 1 third of cities exceed the 4.5 ratio and some are required to borrow 15 times their salary.

 

The 4.5 Times Salary Benchmark

The 4.5 times salary benchmark is a straightforward calculation that lenders use to determine how much they are willing to lend to a borrower.

For instance, if an individual's annual salary is £30,000, they would typically be allowed to borrow up to £135,000 for a mortgage.

This ratio is designed to ensure that borrowers do not overextend themselves financially, making it easier to keep up with repayments and reducing the risk to the lender.

However, this benchmark is not a one-size-fits-all figure. Lenders may adjust the amount they are willing to lend based on a borrower's existing debt, credit score, and other financial commitments. Additionally, the location of the property plays a significant role, as house prices vary widely across different regions.

 

Halifax and Lloyds have increased their ratio to 5.5 times the borrowers salary.

 

Disparities in Mortgage Affordability Across the UK

Mojo Mortgages' data reveals a concerning trend: the 4.5 times salary benchmark is increasingly out of reach for many potential homeowners, particularly in southern cities.

For solo homeowners, the situation is even more dire, with 96% of cities having a mortgage-to-salary ratio that is considered unaffordable.

We know already that living alone comes at a higher cost and in some cities it's just becoming further out of reach.

The differences in mortgage vs. salary across various regions highlight the growing affordability crisis, with many borrowers needing to stretch far beyond the traditional lending benchmarks to purchase a home.

In some areas, the gap between salaries and house prices has widened to the point where buyers are needing to borrow up to 15 times their salary to secure a mortgage. Bath tops the list of the most unaffordable cities, where the average mortgage-to-salary ratio is a staggering 15.5 times for solo homeowners and 7.7 times for couples. This means people are borrowing over their salary to buy a house.

For many prospective homeowners, securing a mortgage based on salary is becoming increasingly difficult, particularly in areas where property prices far exceed the average income.

This contrasts with Middlesbrough, the most affordable city, where the ratio is just 3.7 times for solo homeowners and 1.8 times for couples.

When trying to find a home you should take into account how much of your salary should be spent on the mortgage being realistic with what you will be able to afford.

 

Policy Updates on Mortgage-Salary Ratios

In September 2024, three major UK mortgage lenders introduced significant changes to their lending criteria, allowing prospective homeowners to secure larger loans with a higher salary-to-mortgage ratio. These changes aim to improve affordability and access to the housing market.

Halifax and Lloyds have both increased their criteria to borrow up to 5.5 times their annual income. This means for someone earning £30,000 a year they could now secure a mortgage of up to £165,000.

Nationwide, one of the largest lenders, updated its policy to help first-time buyers by offering loans up to 6 times their salary, provided they can offer a 5% deposit and choose a 5 or 10-year fixed-rate mortgage. This shift in the UK mortgage-salary ratio marks a notable increase from the previous cap of 4.5 times salary.

According to Mojo Mortgages, this policy change has made 17 cities more affordable for solo buyers, a significant increase from the previous 3 cities. For couples, the number of affordable cities has risen from 52 to 72, reflecting the broader impact of this updated lending approach.

The North-South Divide

The data from Mojo Mortgages underscores a significant North-South divide in mortgage affordability. Southern cities like Bath and Brighton are among the most expensive, with Brighton's mortgage-to-salary ratio standing at 13.72 for solo homeowners and 6.86 for couples. This makes it increasingly difficult for residents in these areas to get on the property ladder without taking on a disproportionate amount of debt.

Conversely, cities in the North of England generally offer more affordable options. Middlesbrough, for example, presents a more realistic mortgage-to-salary ratio, making it easier for both solo homeowners and couples to purchase property without overextending their finances.

 

The Future of Mortgage Lending

For those looking to buy a home, understanding the mortgage-to-salary ratio is crucial. It provides a clear indication of what they can realistically afford and highlights the importance of careful financial planning.

 

 

Teaching Children financial literacy using a budgeting app

Budgeting apps have become essential tools for adults looking to manage their finances effectively. These apps help track expenses, prioritise spending, and prevent overspending that could lead to overdrafts or debt. They offer a clear view of one's financial situation, making it easier to stick to a budget. So why not use these for kids too so that they can learn essential skills from early on?

Introducing budgeting apps designed specifically for kids can be a game-changer. These apps help children learn the value of money, the importance of saving, and how to manage their finances effectively—all skills that will serve them well throughout their lives. Budgeting apps are one way to teach your children financial literacy. By starting young, children can develop better money habits than many adults have, setting them up for financial success in the future.

Change their view of money management by making it engaging and showing them they can control their own purchases if they do it well.

 

Finding a budget app for kids…

 

Why Teaching your kids to be financially literate is important

Money and pensions service data shows that only 47% of children receive a meaningful financial education at home or at school, so millions are without any financial guidance at a time when habits are forming. Teaching your kids to be financially literate will help set them up to build healthy habits and learn to manage their money so that when they need it most they will know what to do.

Many of us know how hard it is to build those habits later on so instilling a healthy relationship with money early on will give them a great advantage. Deciding when your children are ready to learn about money can be difficult but the sooner they learn it they better their relationship will be with the money they earn.

 

Here are some ways you can start teaching your kids to be financially literate;

 

The Bridgerton Universe brings in the cash

The Netflix original series Bridgerton, a lavish period drama set in Regency-era England, has not only captured the hearts of millions of viewers but also had a significant financial impact on Netflix and the broader economy.

Created by Chris Van Dusen and produced by Shonda Rhimes, the series quickly became one of Netflix’s most-watched shows, blending romance, scandal, and stunning visuals to create an irresistible viewing experience. The success of Bridgerton can be measured not only by its viewership but also by its cultural and economic influence and we can clearly see, the Bridgerton universe brings in the cash.

 

How much did Bridgerton cost?

Producing Bridgerton was no small investment. Each episode of the series reportedly cost around $7 million to produce, reflecting the high production values that have become synonymous with the show. These costs cover everything from the elaborate costumes and detailed sets to the star-studded cast and the intricate cinematography that brings the world of Regency London to life. Despite this hefty price tag, Netflix’s investment in Bridgerton has paid off handsomely. The series quickly became one of the streaming platform’s most popular offerings, drawing in millions of viewers worldwide and solidifying Netflix’s position as a leader in original content.

Netflix has been generously spending on producing their original shows, find out how much their most expensive shows cost.

 

How much did Bridgerton make?

The financial success of Bridgerton extends beyond Netflix’s subscriber base. The series has contributed significantly to the UK economy, over the past five years.

According to reports, the Bridgerton series has added £275 million to the UK economy, providing a substantial boost to the country’s creative industries.

This economic impact is felt most acutely in the local businesses that support the production, including costume designers, set builders, caterers, and more. In total, Bridgerton has supported around 5,000 local businesses, having a ripple effect on the local communities.

The cultural impact of Bridgerton has also translated into economic benefits, particularly in the tourism sector. Fans of the show have flocked to filming locations across the UK, contributing over £5 million to local economies in areas such as Bath, Bristol, and the surrounding regions.

Iconic locations like Castle Howard in Yorkshire have seen an increase in visitors due to the series providing benefits to hotels, restaurants, souvenir shops and more.

castle howard, north yorkshire, uk

Beyond tourism, Bridgerton has influenced consumer behaviour in a variety of ways. Fans have sought to emulate the show’s distinctive style, leading to a surge in demand for Bridgerton-inspired clothing, makeup, and home décor. Recognising this trend, Netflix launched a Bridgerton merchandise shop, offering themed clothing and accessories that further capitalised on the show’s popularity. The series also sparked collaborations and partnerships with various brands, including Republic of Tea, Kiko Milano, Pat McGrath Labs, and Allure Bridal. These collaborations have generated additional revenue for both Netflix and the participating brands.

One notable example of the show’s commercial influence is the partnership with Lush, a popular cosmetics brand. After launching their Bridgerton collection, Lush saw a 25% increase in monthly subscribers, with 20% of sales coming from new customers.

The Bridgerton Universe has not only created huge success for Netflix and those involved but the indirect impact on the surrounding areas and businesses highlights the affect that popular shows can have on an economy.

Will the next season bring in even more?

 

 Understanding the Right to Buy Scheme

The Right to Buy scheme is a government initiative in England and Northern Ireland designed to help secure tenants of council properties and housing association homes purchase their home at a significantly discounted rate. This scheme, similar to the Help to Buy scheme can help those struggling to get onto the property market.

 

Are You Eligible?

Eligibility for the Right to Buy scheme is not automatic; certain criteria must be met to qualify.

 

The Discount Available

The discount you receive under the Right to Buy scheme depends on two main factors: how long you have been a tenant and whether your property is a house or a flat. This will help you in understanding the right to buy scheme and whether this is something you could afford.

The maximum discount is £102,000 and for London properties this increases to £136,000.

For a House

If you live in a house, you can receive a 35% discount on the market value if you have been a public sector tenant for 3 to 5 years. For every additional year after the first five, you can gain an extra 1% discount, up to a maximum of 70%, or £96,010 across England, whichever is lower.

Example: Let’s say your house is valued at £120,000, and you have been a tenant for 10 years.

You would be eligible for a 40% discount (35% for the first five years plus an additional 5% for the extra five years).

This discount would reduce the purchase price to £72,000, the amount you would have to pay yourself and through a mortgage loan.

For a Flat

For flats, the initial discount is more substantial. You can receive a 50% discount if you have been a tenant for 3 to 5 years. After that, the discount increases by 2% for each additional year of tenancy, with the same overall maximum of 70%, or £96,010 across England, whichever is lower.

Example: If you have lived in your flat for 10 years, and it’s valued at £100,000, you could receive a 60% discount, bringing the purchase price down to £40,000.

 

Limitations of the Right to Buy Scheme

While the Right to Buy scheme offers substantial discounts and a pathway to homeownership, it’s important to be aware of its limitations and responsibilities before applying;

One of the critical considerations is your ability to manage mortgage payments. Owning a home comes with significant financial obligations, and failure to meet mortgage payments can lead to repossession by the lender.

The scheme is only available to those living in public sector housing. If you live in private or non-qualifying housing, you are not eligible.

If your home is repossessed due to missed mortgage payments, the council or housing association is not obligated to rehouse you, which could result in losing both your home and your right to a secure tenancy.

 

This scheme is a valued method for many trying to get onto the property market for the first time offering significant financial benefits. It is crucial to fully understand how the scheme works as well as the financial responsibilities you will have to take on if you are approved.

 

In 2024, Taylor Swift's "Eras Tour" has not only cemented her status as a global superstar but has also shattered records, becoming the highest-grossing music tour ever.

 

Swifties are carrying the economy this summer

The economic impact of Taylor Swift’s tour ripples through various sectors, with each benefiting significantly from the surge of fans flocking to her concerts. The music venues, first and foremost, have seen record-breaking ticket sales, with each venue filled to capacity, generating substantial revenue from not just ticket sales but also from merchandise and concessions.

Hotels across the UK, particularly in London, have experienced a notable spike in bookings. Many fans are booking accommodations months in advance, with some staying multiple nights to fully immerse themselves in the Swiftie experience. Barclays research predicts that each person attending the tour will be spending an average of £848, this includes expenses on accommodation, dining, shopping, and transportation, contributing significantly to the local economy.

Transport services, including airlines, trains, and local transit systems, have also seen a significant boost as fans travel from all over the country and beyond to attend the concerts. Retailers, especially those located near the concert venues, have reported increased foot traffic and sales, with fans purchasing everything from Taylor Swift merchandise to clothing, accessories, and souvenirs. The hospitality industry, including restaurants, cafes, and bars, has benefited immensely as well, with many fans choosing to dine out during their stay.

taylor swift 2

The Taylor Swift Economic Effect

Taylor Swift’s, Eras Tour is more than just a series of concerts; it’s an economic engine driving substantial financial activity across the UK. With each fan contributing significantly to various sectors including music venues, retail, hospitality and more there is an estimated £1 billion boost to the overall economy.

With shows in selected large UK cities the boost may be disproportionately spread across the country, however many people have been extending their trip to explore further. London has emerged as the central hub of her UK tour, with 700,000 fans attending the shows.

There will be an estimated £300 million brought into the city’s economy.

Visit London has created an online guide just for Swifties so they can make the most of their trip to the city, there are other tributes to Taylor Swift around the city too, can you spot them?

 

Taylor Swift’s Supporting UK Foodbanks

Beyond her economic contributions, Taylor Swift has also made a substantial impact through her philanthropy. In each city where she performs, Swift has donated generously to local foodbanks, a gesture that has provided much-needed support.

In Cardiff, her donation to the local foodbank was their largest ever, providing enough food, by weight equivalent, to feed 1,200 people three meals a day for three days. This donation was a lifeline for many and emphasised Swift’s commitment to giving back to the communities that support her.

Similarly, in Liverpool, the foodbank received a donation that they estimate will sustain their operations for the next 12 months, ensuring that thousands of people will have access to essential food supplies during tough times.

 

Taylor Swift is not only indirectly boosting the economy through her Eras Tour but the music star is also supporting the local communities she visits as a time where thousands are using the help of foodbanks.

 

Taking out a business loan can be a strategic move to fuel growth, invest in new opportunities, or manage cash flow. However, the consequences of being unable to repay these loans can be severe.

It’s crucial to understand what happens if you default on a business loan, how lenders may react, and the measures you can take to avoid such a predicament. You can also try software to manage your loan.

 

What happens if you can’t pay back your business loan

Defaulting on a business loan means that you have failed to meet the repayment terms agreed upon with your lender. When this occurs, the lender has several options to recoup their losses:

In many cases, business loans are secured with collateral, which could include company assets such as equipment, inventory, real estate, or even intellectual property. If you default on your loan, the lender has the legal right to seize these assets. This process is often facilitated through a lien, which gives the lender a claim over the business's assets until the debt is fully satisfied.

Once the lender has claimed the assets, they may proceed to sell them to recover the outstanding loan amount. This can lead to significant disruptions in business operations, as essential assets are stripped away and sold off, often at a fraction of their value.

If the sale of assets does not cover the full amount owed, lenders can take legal action against the business. This could result in court judgments, which may include wage garnishments or levies on business bank accounts. In some cases, the personal assets of the business owners may also be at risk, particularly if personal guarantees were signed when the loan was taken out.

Defaulting on a loan can severely damage your business's credit rating, making it difficult to secure future financing. A poor credit score can also affect relationships with suppliers and customers, as it may signal financial instability.

 

The Strategic Use of Business Loans

While the consequences of failing to repay a business loan are daunting, taking out a loan can be highly beneficial if managed correctly. Business loans can provide the necessary capital to expand operations, purchase new equipment, hire additional staff, or improve cash flow during slow periods. They can also help to build a business's credit profile when repayments are made on time.

Between 2019- 2022 the most popular forms of financial support were bank overdrafts, government grants and business credit cards.

Around 12% of small businesses opted for one of these three options leading up to 2022.

 

Key Considerations Before Taking Out a Loan

Managing your finances before and during taking out a loan is crucial to staying on top of paying it back to minimise risks and to reap the full benefits on offer.

Clearly define the purpose of the loan and ensure that the expected return on investment justifies the borrowing cost. It’s important to conduct a thorough analysis of your business’s financial health to determine your ability to meet repayment obligations.

Read the loan agreement carefully, paying close attention to interest rates, repayment schedules, and any potential penalties for late payments or defaults. Be aware of the collateral requirements and the implications of personal guarantees.

Before committing to a loan, explore other financing options such as grants, equity investment, or lines of credit. These alternatives might offer more favourable terms or lower risks.

Develop a robust financial plan that includes contingencies for unexpected downturns. This plan should outline how you will manage loan repayments during periods of reduced revenue or increased expenses.

Engage with financial advisors or accountants to gain a comprehensive understanding of your borrowing options and obligations. Their expertise can help you make informed decisions that align with your business goals.

 

While business loans can be powerful tools for growth and sustainability, failing to repay them can lead to serious financial and operational challenges. By carefully assessing your needs, understanding loan terms, exploring alternatives, and planning for the unexpected, you can manage the risks to optimise the benefits of a business loan and avoid what happens when you can't pay back your business loans.

 

 

The UK’s water industry has been under intense scrutiny since it was discovered that millions of litres of raw sewage was being pumped into rivers and waterways. This came as the water companies were also planning to increase bills in the UK which sparked outrage as their operations pollute the UK’s water whilst asking for more money!

 

Ofwat’s investigation

Ofwat have announced a fine issued to three of the largest water companies totalling £168 million.

This marks a significant development in Ofwat’s largest ever investigation into industry practices and compliance, which continues to examine the remaining 8 water companies.

Thames water, the country's largest water and wastewater services provider, has been hit with the heftiest fine of £104 million, representing 9% of their annual sales.

Ofwat, the regulatory body, has the authority to impose fines of up to 10% of a company's turnover, highlighting the severity of Thames Water's violations. The company, which serves millions of customers across London and the Thames Valley, has been penalized for significant failings in its service delivery and environmental compliance.

Northumbrian Water, serving the Northeast of England faces a fine of £17 million. Finally, Yorkshire water are being find £47 million for their violations.

 

Where will the money go?

In April, £11 million from fines and penalties was reinvested into the Water Restoration Fund. This initiative offers grants to charities, local groups, farmers, and landowners to improve waterways and wetlands. The fund aims to restore the environmental damage caused by the water companies' failings and supports community-led efforts to restore and protect natural water resources.

 

Affect to the Water companies

These fines are expected to have significant financial implications for the companies involved, potentially affecting their investment capabilities and operational budgets.

Thames water have previously stated their significant financial debt of £15.2 billion. With fines of £168m imposed on three water companies this could cause concerns for the financial health of the industry.

With the water companies being fined so heavily and due to their current financial disaster it may cause them to increase water bills in order to pay their debt. Ofwat’s 2024 price review indicates a price limit of 21% increase between 2025-2030. This caps water companies from rising their bills above this.

 

Paying for diabetes

Type 2 diabetes, a chronic condition affecting millions globally, imposes profound financial burdens on individuals and healthcare systems alike. Beyond any direct expenses, diabetes also significantly impacts the labour market, insurance costs, and individuals' financial stability.

 

The cost for the NHS

Approximately, 5.6 million people are living with diabetes with more living with the illness without a diagnosis.

This places an extraordinary load onto the NHS with at least £10 billion being spent annually on diabetes care, this is 10% of the overall budget.

80% of the expenses is dedicated to treating complication arsing from diabetes, highlighting the extensive impact this condition has on those living with it as well as healthcare system.

 

Financial cost of living with type 2 diabetes

The financial cost of diabetes extends to those living with the illness everyday juggling managing their treatments with working and earning a living.

From just January to March in 2023 there were over 360,000 working age adults who were economically inactive due to long-term sickness.

40,000 of those attributed their absence specifically to their diabetes. The illness significantly impacts people’s ability to work and earn a wage creating a heavy financial burden for them through not only every day living costs but also their healthcare and treatment costs.

According to Diabetes UK, 77% of people with diabetes report that the rising cost of living has negatively impacted their ability to manage their condition. Moreover, 66% have had to cut back on essential expenses like energy and food, which can further compromise their health. When individuals have to choose between buying medications and paying for basic needs like food and heating, their ability to effectively manage their condition is compromised. This can lead to a vicious cycle of deteriorating health and increasing medical costs.

 

Employment and wages

Managing diabetes in the workplace required regular monitoring of blood glucose levels and adhering to strict eating schedules when necessary. Time off work for frequent medical appointments and ongoing medication is often another impact from diabetes which means needing a flexible work schedule.

Although UK law does not mandate that employers have to pay for time off due to diabetes, causing many to have a cut in their monthly wages. The Disability Discrimination Act does required employers to make reasonable adjustment to ensure no one is faced with a disadvantage. These might include allowing extra time for meals and tests.

 

Cost of Insurance

On average, life insurance premiums are 2.6 times more expensive for those with diabetes. It is typically possible to obtain standard life insurance through major providers such as, Aegon, Royal London, LV and Exeter which are recommended by Diabetes UK.

It is recommended to take out insurance at a younger age premiums will increase with age.

Health Insurance also presents certain challenged for diabetics. As diabetes is classifies as a pre-existing condition, providers may exclude coverage for treatment related to the illness. This could also cause the price of the coverage to increase as those with a pre-existing condition are more likely to need any treatment.

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