4 in 10 people who cannot find £300 in an emergency earn more than the average wage

Four in 10 people who could not pay a surprise £300 bill earn more than the average UK worker, according to joint research by Plend and investment firm Triple Point.

The £300 figure matters because the Financial Conduct Authority uses it as a rough test of whether someone could cope with an unexpected cost.

The report also found that 36% of people earning between £40,000 and £80,000 said their money situation got worse over the past year.

That’s not far off the 49% of people earning under £40,000 who said the same. And it’s much higher than the 22% of people earning over £80,000.

Lindsay Smart of Triple Point said cost of living "is reaching people on living wage salaries who are turning to credit simply to cover the essentials".

Why is a good wage not enough any more?

People earning more tend to have bigger bills to cover, such as a bigger mortgage, childcare, cars on finance and higher insurances.

Those costs were taken on when their wages felt comfortable. And they don’t drop when everything else goes up.

So when prices rise, there’s often less spare cash available even though their salary is still comfortable on paper.

Someone on £55,000 with £2,400 going out every month on bills they can’t avoid can have less left over than someone earning far less with cheaper outgoings.

Who does not ask for help?

Plenty of people think debt advice is only for those on the lowest incomes.

That belief stops people picking up the phone.

But waiting does more damage, because arrears grow and defaults appear on the credit files.

What else did the report find?

35% of UK adults said they were borrowing to pay for essentials like food, heating and rent.

89% said the cost of living had hit them over the past year. That is up from 84% the year before. Try our cost of living calculator to find out how it has affected you: Cost of Living Calculator

23% said they had used buy now pay later (BNPL), which the report says is up on last year.

Around 2 million people said they had borrowed from an illegal lender.

37% said a low interest loan would improve things for them. Among people aged 18 to 34, that rose to 58%.

What can you do about it?

If you’re worried about your finances, speak to us. We can go through what comes in, what goes out, which bills come first and what arrears you might have.

And anyone who has borrowed from a loan shark can get confidential help from Stop Loan Sharks. It does not matter how much was borrowed or how long it has been going on. Find our more about loan sharks here: Loan sharks – everything you need to know