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Personal finance differences between the UK and US

Posted June 29, 2017 by AGillam to Finance News 0 0
This post was written by a EasyFinance.com Community member. The views expressed below may not reflect the views of EasyFinance.com.

 

Who does it better…

Personal finance is something that all of us have to tackle. It’s a topic that covers everything, from making sure that you budget successfully for all your incomings and outgoings, to putting money aside for retirement and looking at the risks and rewards of various financial products. When it comes to how we spend our money, how we organise it and what personal finance considerations there are for people in the UK and the US there are some pretty big differences.

Americans have more outgoings to consider

Figures from Eurostat’s The EU in the world highlight just how much people in the United States have to factor in spending that other countries don’t. For example, the percentage of household spend that goes on essentials like healthcare is much higher in America than in the UK and for other countries in the EU. When it comes to personal finance many Americans have less cash to begin with thanks to a lack of free or subsidised healthcare.

But Americans also earn more

Average wage data from both countries indicates that the average Brit has less take home to use when it comes to managing personal finance decisions. According to the Annual Survey of Hours and Earnings, the average salary in the UK is now £27,600. In the US, data from the US Census Bureau indicates that the average American salary is up at around £39,000. So, if you’re living stateside then you’re likely to be able to do more on the personal finance front.

If you’re British then you’re less likely to be comfortable in debt

Despite the fact that we’re currently borrowing around a total of £1.529 trillion in the UK, research tells us that Brits are much less comfortable when it comes to borrowing money as part of a personal finance plan. On this side of the Atlantic people tend to look at other options first, rather than applying for personal loans or credit cards without a second thought. Americans, on the other hand, are perfectly comfortable with personal debt – in 2016 the total US household debt rose to $12.6 trillion.

Brits are more focused on pensions and retirement planning

Although one in five British people aren’t putting anything aside for their golden years, 68% of Americans don’t have a pension. So, while pension planning is somewhat lacking for both countries it’s the Brits who actually come out on top with respect to ensuring that there is some cash available for old age. Things are improving for Brits too with the average British Millennial starting to pay into a pension at the age of 23.

Buying a property in America is more expensive

The UK housing market just keeps on rising, pricing many first time buyers out of the market and making personal finances difficult when it comes to getting a roof over your head. But it’s not just in Blighty that the market has gotten a bit out of control. The average UK house price is now £234,794 (as of March 2017), while in America the average 2017 sales price is now $390,400 (roughly £302,000).

About AGillam: Amanda Gillam has been a personal finance writer for Solution Loans for many years. She helps people keep up to date with the fast-paced developments in the world of personal finance and offers advice to help everyone manage their money better.  

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