Those who have credit card debt and are finding it increasingly hard to pay off due to pay freezes may be facing this situation for up to two more yea…
Those who have credit card debt and are finding it increasingly hard to pay off due to pay freezes may be facing this situation for up to two more years, an expert has warned.
Spokesman for candidmoney.com Justin Modray said: "Pay freezes are an unwelcome by-product of our stalling economy and a government that needs to cut back spending, so I doubt matters will improve for at least another year or two."
He added that pay rates will also be held down by increased competition in the jobs market as unemployment rises.
Mr Modray said the stretching of household finances is the main reason the Bank of England is "reticent" about raising interest rates, since this could make life very hard for mortgage payers and such a move would be "the straw that breaks the camel's back".
He also listed inflation and in particular rising utility bills as being a major factor in putting pressure on the finances of consumers.
Those who are struggling because of this may find a debt management plan can ease the strain and enable them to avoid defaulting on any payments.
Such stresses may be felt most by public sector workers, whose pay is currently frozen by the government.
Britons on middle incomes are now facing an additional problem with falling income in real terms on top of pay freezes, according to the Resolution Foundation.
It said many people are set to struggle with lower tax credits and the prospect of a lifetime spent renting.
By Joe White