The number of people taking out individual voluntary arrangements (IVAs) in the next six months could be set to rise, if the levels of pessimism expre…
The number of people taking out individual voluntary arrangements (IVAs) in the next six months could be set to rise, if the levels of pessimism expressed by consumers about their prospects turn out to be correct.
A poll by insolvency body R3 found 43 per cent of people believe their own monetary position will get worse in the next half-year, 13 per cent more than gave the same answer to the same question in the previous poll three months ago.
R3 president Steven Law said the situation was likely to have been caused by recent developments such as rising prices and the VAT increase.
He stated: “This has happened against a backdrop of pay freezes, pay cuts and, in some cases, redundancies, so it is understandable that many are feeling pessimistic about their financial outlook.”
And the number worried about debt was up by six per cent to 45 per cent, with 56 per cent of those concerned citing what they owed on their credit cards as the main cause for anxiety, while those aged 25-34 were the most likely to be troubled by debt, something 57 per cent of this group reported.
“In my experience, most people’s debts become unmanageable due to a change in circumstance, such as sudden unemployment,” Mr Law stated.
Those in such a situation may need an IVA to get their debts under control.
The levels of debt people are getting into may be deeper in nature than they actually realise, money advice co-ordinator at the UK Insolvency Helpline Richard Sorsky recently warned.
He said consumers often borrow without checking the interest rate first.
By Amy White