People are continuing to face financial pressure, new research indicates.
According to figures released by Chiltern, the typical annual income of a Briton looking for help in managing their debts, which may have been accrued through personal loans and plastic cards, has increased by about 3,000 pounds since last August. During this time, the average person seeking assistance with money management earned 20,540 pounds, this has now risen to 23,432 pounds. Meanwhile, the level of money owed has fallen to 26,344 pounds from 26,662 pounds.
However, the company claimed that consumers are still experiencing money management difficulties, as the proportion of men looking for help from professionals with handling their debts has gone up by one percentage point to 43 per cent. In addition, the typical age of a debtor has increased to 44 years. And, despite an increase in salary since the August study, those on a debt management plan will still take them more than 12 years to be free from debt. In addition, such consumers have a monthly disposable income of 228 pounds and owe money to an average of eight creditors. It was also suggested that impact of the credit crunch has reduced the availability of cheap loans and other forms of competitively-priced borrowing, particularly for those who have a “tarnished” financial profile.
Joanne Gill, spokesperson for Chiltern, said: “Our figures show that over the last six months the average yearly income of our clients has risen by over 14 per cent while the average debt has fallen by 1.2 per cent. This suggests people who earn more and owe less are being forced into seeking help to manage their finances because of a number of conspiring factors.”
Citing figures from MoneyExpert, Ms Gill added: “Nearly half a million people have missed a mortgage payment within the last six months and with the reduced level of available credit for people with imperfect histories, household finances are taking a battering.” She went on to claim that those consumers who are struggling making repayments towards a number of debts need to “be open to different ways of managing their budget”.
The firm highlighted that household bills and other types of “priority payments” have increased “significantly” over the past 12 months. Meanwhile, gas and electricity bills have risen by 16.2 per cent, costing an average of 1,055 pounds 76 pence per annum, up from 908 pounds 49 pence recorded this time last year. Research from Chiltern also indicated that the cost of food shopping has surged by 12 per cent, while later this year council tax is to increase by four per cent to 1,373 pounds for the average band D property.
Following from increases in various living costs, it is also possible that people could find pressure on other demands on their finances increasing. Such consumers may develop more problems in paying off loans and plastic cards, as well as finding that they have less money to put into savings accounts and pensions schemes.
Britons worried about making repayments to various creditors and managing rising living costs might wish to consider getting a UK consolidation loan. In doing so, consumers can merge a number of debts into a single low-cost monthly repayment. This may be helpful for a significant number of consumers as a recent Combined Insurance study revealed that two-thirds of people witnessed an increase in the cost of their utility bills during 2006. Meanwhile, the cost of running a car and mortgage repayments have gone up by 12 and ten per cent respectively.