Household Debt Causing People to Dip into Savings
According to recent research and the monthly Markit index, Britain’s household finances are deteriorating at their fastest rates since the recession was at its most volatile in 2009. There is new information which leads us to believe that consumers are having huge problems with their household finances, stemming from rising prices of most household items and fuel, as well as wage cuts and job losses.
The monthly market index, this month showed that people are actually using their savings to pay for everyday essential items, as in many cases, their normal wage will simply not make ends meet, and also people are getting themselves into more and more debt as a consequence of having to purchase every day items like food shopping and essential groceries on credit cards and overdrafts.
In 2010, the average person seeking debt advice had an average debt of £19,338 on credit cards, personal loans and other unsecured debt. Will that debt continue to rise in 2011, the current stats are looking likely, if not quite probable.
The rise in debt amount and the number of people who are getting into debt and having to use savings for their every day essential items, is promoting fear in many that we could soon be suffering in a double-dip recession.
There was a short influx in spending in April/May 2011, due to the royal wedding and Easter celebrations, as well as a large period of warm and sunny weather. The influx of spending did not last long though unfortunately, and it was actually reported in June that 36% of people had said that their finances have worsened this month compared to last, whilst there was only 6% of people that reported an improvement in their financial state.
The current situation that we are in financially is reported to be the longest and deepest recession since the 1930’s. Household finances have been depreciating at the fastest pace since Q1 of 2009, with a strong emphasis on people getting into debt and spending on credit cards between Q1 of 2009 and the current climate today, just to fund the general cost of living such as petrol increases, and increase in groceries. One in five people have actually reported an increase in debt over this period, as opposed to only 15% of people who are experiencing a drop in the amount of debt they have. The main spike in the increase of debt is predominantly seen amongst 18 – 24 year olds, who seem to be most likely to take out more credit to fund their lifestyle.
The past two years has taken its toll on the average household, and over half of the population are still living in fear of losing their jobs or are worried about job security in general.
Inflation is rising by 4.5% year on year, whereas the average pay increase is of just 1.8%, so many are asking the question “When will the wages catch up with the level of inflation?”
For many living in debt, it can be stressful and they can feel that there is no way out. There are products available on the market such as bankruptcy, IVAs (Individual Voluntary Arrangements) and debt management plans that could be applicable for some who are in debt.
If you are in debt and would like to discuss you options, whether it is an IVA,
a debt management plan or bankruptcy, please contact Debt Release Direct on 0800
019 7465.
Debt Release Direct
From time to time, many of us experience problems concerning debt management and find ourselves in need of debt help or simple debt advice. If you find yourself in a similar situation, it pays to speak to a professional, and fast, because getting the right advice and taking action can prevent debt management issues from escalating further.
Debt Release Direct is part of Release Money Group, and ensure suitability of advice by having qualified debt experts available to advise you. For debt help and advice regarding debt management and debt consolidation, Debt Release Direct provide high quality, professional guidance and effective debt management plans and solutions. We are proud of the financial services we deliver; and we're confident that you could benefit greatly from our assistance.
As a founding member of the Debt Resolution Forum (DRF), Debt Release Direct are helping to promote professional debt management standards and are spearheading the adoption of the professional Cert-DR qualification in debt advice. Our debt advice and professional debt services are available through face to face, telephone, or online communication, and our experienced, friendly and helpful team are standing by to provide expert debt management and debt consolidation information; and support you in strictest confidence, with no obligation.
If you qualify to write off unsecured debt in an IVA, we refer you to our in-house insolvency practice Varden Nuttall Ltd, which is the UK's top-rated insolvency practice by customers on IVA.com and in top-3 2010 lists by creditor representatives TIX and KPMG.
Debt Solutions : We Can Offer...
Debt Release Direct is an appointed representative of Release Money Limited which is authorised and regulated by the Financial Services Authority for mortgage and insurance mediation services.