Only 1 per cent of Brits in ‘peak financial condition’

A national study of financial fitness released today from Abbey has revealed that just one in 100 Brits is in peak financial condition, while the average person is a massive 43 per cent overweight in financial terms.

The research from Abbey analysed the personal finance behaviour of Brits and rated their overall fitness according to the financial products they hold, the competitiveness of these products and how often they shop around for better deals. The products assessed in the study were bank accounts, mortgages, savings, insurance and credit cards. A score of zero indicates a lean financially fit machine and 100 is the financial equivalent of being obese.

Women returned an average score of 46 per cent overweight whilst men scored a leaner, yet still overweight, 41 per cent. Abbey’s research found that women were weighed down by a number of factors. 31 per cent have not got their mortgage at a competitive rate; 25 per cent have not shopped around for insurance products; and 70 per cent of women have either no savings or only enough to maintain their standard of living for less than three months. Comparative figures for men were 26 per cent for mortgages, 17 per cent for insurance and 61 per cent for savings.

The fittest regions in the UK were Wales and the South West (42 per cent financially overweight) whilst those in the North of England weighed in 46 per cent. The North West’s financial obesity score was compounded by a high number of people in this region who have an uncompetitive mortgage rate (35 per cent), have a credit card balance on their issuer’s standard rate (23 per cent) and have a current account with an interest rate of less than one per cent (41 per cent).

Sue Hayes, Director at Abbey said: "The research suggests that the majority of people are in need of a financial workout to get their finances in peak condition for 2008. As many gear up to shift the pounds they pile on over the festive period, we would encourage people to review the financial products they hold and shop around to ensure that they are getting the most competitive deal available. Like exercise, a financial workout can take a bit of effort but for most people the rewards are well worth the exertion.”

Current accounts

Forty one per cent of people have had the same bank account for more than ten years. This figure is highest with the over-55s (61 per cent) and the Scots (48 per cent).
Seventy four per cent of people have a current account with an in-credit interest rate of less than three per cent.

Credit cards

Sixteen per cent of people carry a balance on a credit card at their lender’s standard rate.
Women are significantly more likely than men to be paying through the nose on their plastic with 21 per cent revolving a balance at a standard rate (versus 12 per cent of men).

Mortgages

Only 53 per cent of people regularly review their mortgage to get a better deal.
Twenty nine per cent of homeowners do not have their mortgage at a competitive rate with this proportion.

Insurance

Twenty one per cent of people renewed their home insurance without shopping around and a worrying four per cent do not have any home insurance at all.
Those living in the South East were most likely to renew their insurance without shopping around (27 per cent).

Savings

Only 34 per cent of the population have enough savings to be able to maintain their current standard of living for at least three months. This figure increased to 56 per cent amongst the over 55s.
Seventy eight per cent of Scots had either no savings at all or not enough to be able to maintain their current standard of living for three months.
Only half of those with a savings account have recently shopped around to get the best rate.

To help people get the finances into shape for the New Year, Abbey is offering competitive deals worth considering. These include eight per cent interest on bank accounts for 12 months on balances up to £1,000 (or £2,500 if you switch accounts), 7.25 per cent on our fixed rate monthly saver, zero per cent on balance transfers for 13 months and zero per cent for three months on payments with the Abbey credit card.

For remortgagers, if your existing deal has ended, you could save money by switching to our competitively priced two-year fixed rate deal. There are also great rates available on additional loans.