A new study from Lloyds TSB claims 46 per cent of adults in the UK are 'financially overweight', while more than 10 per cent are approaching the 'financially obese' mark.
Its Bank Mass Index, developed by Professor Stephen McKay of the University of Birmingham, is designed to assess financial well being. By asking a range of questions about investments, pensions, savings, home ownership and unsecured debt, the index works out whether the person is financially obese, financially overweight, or financially fit.
With an average £BMI score of 28, most adults in the UK fell into the financially overweight category, which ranges from 26 to 29. This means that debt for these people far exceeds savings and suggests they could be stretched beyond their means.
Although 42 per cent ended up with a score of between 20 and 25, deeming them financially fit, 12 per cent landed in the financially obese division. This suggests they are over-reliant on debt and tend to spend more than 25 per cent of their gross monthly income paying off unsecured debt. According to the study, 42 per cent of respondents have no savings at all.
Managing director, consumer banking, Ian Larkin, said: "Our physical health is something that the nation is taking increasingly seriously. Most of us know our Body Mass Index, but our financial health seems to be less of a priority and often people have misapprehensions about the real state of their money."
Geographically, Scots are most likely to be financially obese, with an average score of 33, while 51 per cent of Londoners are also overburdened, with an average of 31. The most financially fit were found to be in the South West (25) and Wales (26).
Meanwhile, women are worse of financially with men, scoring an average 28 £BMI versus 27 and, unsurprisingly, 18-24 year olds struggle the most with an average score of 31 compared with those aged 55 and over, who had a comfortable average of 24.
The bank also found that 27 per cent of adults do not know how to start sorting out their money matters, while 25 per cent did not feel motivated enough to give it a go. Around 22 per cent claimed they would find getting their finances in shape too challenging, while another 22 per cent said they did not have time to do so.
Despite this, 19 per cent said the index had given them a push in the right direction, and 16 per cent said they would take immediate action. A further 38 per cent said they were unable to sort out financial problems right now but plan to do so in the future.
Some of the top tips from Lloyds include: examining spending habits carefully and checking bank statements; thinking of ways to reduce spending; making a practical budget; prioritising debt repayments so high interest debt is paid off first; consolidating debts with a
consolidation loan; and asking for financial help when it is needed.
© Fair Investment Company Ltd