It has been revealed in a recent report from a leading debt charity that many people who are on lower incomes are struggling with their debts, with a range of factors having affected their ability to hand existing debt and forcing them to get deeper into debt over the past few years. For many people it has become increasingly difficult to cope with debt repayments due to so many other factors that have affected their finances.
Officials from the Consumer Credit Counselling Service said that people on lower incomes were really struggling with debts now, having become increasingly reliant on things such as credit cards and loans and having found it more and more difficult to cope with the repayment increases. This is due to factors such as the rising bills, soaring inflation and living costs, frozen or cut wages, job losses, and government cutbacks amongst other things.
The CCCS said that people that were earning less than £13500 a year tended to owe around 20 percent more in unsecured debts than they actually earned. This would mean, for instance, someone earning £10,000 a year owing around £12,000 in unsecured debts such as credit cards and loans. This data came from the charity’s recent report, the Debt and Household Incomes report.
One industry official said that things could get worse in the foreseeable future for some people, stating: “Many people who scraped through the recession are going to find the next few years even harder.”
The CCCS stated: “Unfortunately, these figures confirm our fears – that troubled times lie ahead for many people in the UK. This pain is going to spread wider and affect many more people than commentators previously assumed.”
Tags: government, instance, job losses, loans, debt consolidation, repayment, Financial Planning