· Over 11 million1 UK households dependent on more than one salary to cover the bills

· Of the 7.1 million2 UK households with dependent children – 3.5 million are reliant on two salaries

· Levels of debt increases with children – with the average household with 2 children over £100,000 in debt – £20,000 more than those with no children

· Over half of Brits have less than two month’s salary tucked away in savings for a rainy day

Research published today by Scottish Widows, reveals that the cost of running a home means that almost half (44%) of the nation’s households require more than one breadwinner to maintain an acceptable standard of living. What is more when it comes to those with dependent children, the need for two incomes increases, with one in two households relying on both partners working.

How many wage earners does your household need to maintain an acceptable standard of living for you or your family?

...................One salary.......Two salaries or more
National average.......45%.....................44%
1 Dependent Child......45%.....................49%
2 Dependent Children...42%.....................51%
3 Dependent Children...45%.....................50%

Commenting on the findings, Scottish Widows’ Scottish Widows’ interim protection market director Richard Jones says:

“This reliance on two incomes to buy and run the family home means millions of households are effectively doubling the risk of financial hardship should one of bread winners become unable to work.”

The need for both partners in a household to work may be influenced by the rise in consumer credit. The report shows almost five out of 10 (47%) Brits have a mortgage, six out of 10 (60%) have secured or unsecured loans, overdrafts or finance agreements – and a similar number (63%) have credit card or store card debt. Those with children have, as would be expected, higher levels of debt on both loans and credit cards than those without.

Type of Debt...........................................No Children........2 Dependent Children......3 Dependent Children
Mortgage (national average £74,050.......................£66,600................£83,800.....................£80,200
Loans/finance agreements (national average £11,030)......£10,600................£12,300.....................£13,500
Credit cards/store cards (national average £4,540).......£4,300.................£4,500......................£6,510

This means that the average household with two dependent children is £100,600 in debt – £19,100 more than the average household with no children.

Commenting on the findings, Richard Jones says: “Our report reveals that the mixture of relatively low interest rates and high job security means borrowing has been an attractive option in recent years. The problem is that servicing this debt eats into our take home pay and exposes us to financial hardship should we be unable to work. Low inflation also means debts are eroded more slowly over time – again increasing the need for financial protection.”

The report also shows that many do not have much in savings tucked away for a rainy day. Over one in four (27%) have no savings at all – and a further one in four (25%) have less than £3,000 – meaning that the savings pot of more than half of all households in the UK will last less than three months.

As with debt, families are in an even worse position:

........................No savings......................Less than £3,000
No Children................25%................................27%
1 Dependent Child..........27%................................28%
2 Dependent Children.......30%................................24%
3 Dependent Children.......32%................................23%