Money digest: today’s need-to-know financial news | 7 June 2016

Gloomy news on the front page of The Times this morning: according to a poll for the paper, one in three middle-class people could not pay an unexpected bill without resorting to borrowing. According to research by YouGov showing the squeeze on household finances, 31 per cent of middle-class voters — so-called ABC1s including professional, junior managerial and administrative workers — would struggle with a sudden bill of up to £500. Forty-six per cent of manual workers and the unemployed would not be able to afford the bill. Since the financial crisis, wages have fallen by up to 10 per cent on some calculations when adjusted for inflation. According to the Office for National Statistics, average disposable income recovered slightly last year to £30,900 but is still below the pre-downturn 2007 level of £31,600. On the road Thisismoney reports that British motorists spend an average of £695 a year keeping their treasured cars on the road – one of the highest figures in the world for servicing and repairs. And it is poised to spark a jobs boom with 40,000 jobs set to be created over the next six years as drivers spend even more on servicing their cherished vehicles.

On average, Britons spend £74 – or 12 per cent – per head above the global average of £621 per vehicle. It means UK drivers collectively spend £21.1 billion servicing 30 million cars each year at garages, according to the report published by the Society of Motor Manufacturers and Traders.

Consumer spending

High street spending rose last month for the first time in more than half a year as the combination of good spring weather and the May bank holiday combined to give struggling retailers a welcome boost. Spending in shops up and down the country was up 0.7 per cent in May, the first positive month since last October, as overall consumer spending increased 3.6 per cent last month, according to figures from Barclaycard. Spending at garden centres grew by 9.4 per cent year on year and by 22.3 per cent month on month. DIY also enjoyed a sharp rebound with spending up by 4.8 per cent on the same month last year and by 6.8 per cent compared with April. Property renovation New research released by Zopa, a peer-to-peer consumer loans service, shows that Britons are renovating their properties to create their dream home for the long-term, with more than two thirds of people undertaking renovations saying they plan to stay in their property for five years or more. Far from viewing their homes as just a financial investment, Brits are opting to create their dream home by investing in improvements to live in for longer, making the UK a nation of ‘improvers not movers’. The survey, of over 1,200 people who had taken a Zopa home improvement loan, found that only a quarter either have had or plan to get their home revalued after renovations, and less than one in ten said they would need to move to be in their ideal home. So far in 2016, Zopa customers have borrowed more than £50 million to improve their homes, a 54 per cent increase on home improvement loans compared to the same period last year. Online banking

The latest Digital Dashboard from Halifax highlights the increased engagement customers now have with their money, with the total number of logons to online banking surpassing 60 million a month for the first time.