Many consumers are continuing to "bury their head in the sand" when it comes to debt, with people trying to maintain an unsustainable lifest…
Many consumers are continuing to “bury their head in the sand” when it comes to debt, with people trying to maintain an unsustainable lifestyle despite the economic situation.
Spokeswoman for Moneyfacts.co.uk Michelle Slade said the fact the cost of living has risen has not deterred some from spending beyond their means.
“They are trying to keep up with friends and family with higher salaries, et cetera,” she noted, while not paying enough attention to the financial problems this is causing.
Such a situation could in time leave people needing an individual voluntary arrangement, as debts accumulate and the repayments become too much to deal with.
This would apply to people with debts over £15,000, with reduced payments over a period of up to five years being established if the revised figure is agreed by at least 75 per cent of creditors, obliging the rest of them to accept it.
What people with money issues should do is check all their outgoings and find ways they could save money by cutting down on non-essential spending, Ms Slade suggested, giving the example of a takeaway coffee.
The expert went on to note there are ways people can reduce their debt as well, advising: “If you have a credit card, maybe start transferring to nought per cent deals and look to make switches and savings to get your costs down.”
A recent study by the Institute of Financial Planning in association with National Savings and Investments revealed 43 per cent of Britons worry about their finance “more often than not“, while 17 per cent are concerned about it “all the time”.
By Amy White