IVAs to help Brits who have no emergency savings

People may find they need individual voluntary arrangements (IVAs) in the future should their financial situation worsen.

This is because research carried out by Scottish Provident discovered nearly four million Britons would be unable to enjoy their current lifestyle past February 2011 if they had to fund it off their emergency savings.

Many would have to use their credit cards in order to survive, which could lead to a situation whereby personal debt levels will escalate.

More worryingly, 31 per cent of those questioned said they do not have any kind of financial safety net. This means they would not be able to get access to money at short notice if they needed to.

Some 23 per cent observed they do not know what they would do if they were expected to start financing their life for themselves due to unforeseen circumstances.

If consumers are left in this situation, they may find IVAs represent a good option for them. This method of debt consolidation will merge unsecured loans into one monthly reduced-rate payment.

Susan Barclay, head of marketing at Scottish Provident, noted the results of the poll make it clear that “urgent action is required”.

She added: “A more realistic understanding about how you will survive should the main breadwinner become unable to work [is needed].” The specialist remarked by having some form of emergency source of income, individuals may have a bit more peace of mind about their circumstances.

Credit Action’s latest debt statistics have recently revealed personal debts are on the rise. Some £1,428 billion is now owed by Brits, which is more money than the country produces in a year.

Posted by Amy White