Published at 14:10, Friday, 01 June 2012

It was ‘Tax Freedom Day’ on Tuesday but a study shows we’ll spend the rest of the year working to pay bills and debt.

Research reveals how many days we will have to work this year to get into the black

May 29 was the first day of that the average British employee stops working for ‘the State’ to pay off their taxes (according to the Adam Smith Institute) and starts earning money to spend as they wish. It fell two days later than last year. However, the study reveals that after tax obligations, the average UK adult will work solidly until late July to keep a roof over their heads – by far the greatest outgoing that adults face on a yearly basis.

The Financial Safety Net report commissioned by Bright Grey shows that the average person will have to work for another 55 days from today to pay this essential cost, meaning that ‘Rent/Mortgage Freedom Day 2012’ will not fall until Monday, July 23. From that day on, household bills such as water, gas and telephone will take 27 days to pay off, and it will be mid-September before food shopping has been accounted for.

Alarmingly it takes 17 full days to pay off debts that average out at nearly £1,500, almost 40 per cent more than is set aside for an annual savings pot (just over £1,000).

Once taxes and housing costs have been paid, everything else follows in priority order. And of course, while many people can make ends meet by the end of the year, there are a significant number who do not have enough disposable income to cover their outgoings, and essentially need more than 365 days to be able to cope with their spending requirements.

Ironically, Britons only have to work for four days to make sure they are fully insured by life, income protection and critical illness cover. For a relatively low outgoing, this should be taken more seriously, but in reality only 40 per cent of the population will have a ‘Protection Freedom Day’. The other 60 per cent don’t have any protection in place to cover themselves or their income should the worst happen.

Published by http://www.cumberlandnews.co.uk