A new ‘debt tracker’ conducted by YouGov asking how GB households are coping with the credit crunch has revealed 21% of households (5 million) are now finding keeping up with bills a constant struggle or have fallen behind with their commitments.

In addition to that, nearly 15 million households, 63%, say their financial circumstances have got worse in the past 6 months, with only 13% seeing an improvement. This comes at a time when 43% of the adult population currently use an authorised overdraft, while 34% have a credit card that is not repaid in full each month. Only 30% have no borrowing at all.

The debt tracker was conducted in consultation with R3, the Insolvency trade body, who are predicting dramatic rises in both corporate and personal debt in twelve months time. ‘Misuse of credit cards’, ‘borrowing without thinking about how to repay the money’ and ‘irresponsible lending by credit providers’ were seen as the top three causes of personal insolvency. R3’s President Nick O’Reilly commented:

“People’s attitude to debt has softened to an alarming degree and we are not surprised that people are borrowing with ‘no idea of how to repay’. The proliferation of credit cards in the late 90s has lead to a situation where 30% of the economy is based on consumer spending. Escalating house prices have given a false sense of wealth and provided security for less scrupulous creditors to lend irresponsibly.

“This is a situation that everyone will have their part to play in diffusing. The key point is that people should seek advice early from a qualified practitioner. The survey also revealed that less than half of those in serious financial difficulties have sought professional help to sort their financial problems which is deeply worrying. People should be less afraid of seeking advice than the consequences of not seeking it.”

There is evidence that households have already adjusted their spending habits. Giving more than one answer; nearly half, 48%, have spent less on ‘nice to have things’ (such as DVDs, CDs and jewellery) while 38% were buying more own label or value goods

Notes
* The ‘debt tracker’ survey was carried out during the periodJuly 31-August 5, by the independent research company YouGov. The base for the survey was 3,329 respondents, and the survey will be repeated on a quarterly basis. The survey was conducted online.
* Further information on the survey can be obtained from: John Cogswell at Yougov, john.cogswell@YouGov.com
* R3 is the trade body for Insolvency Professionals, and is made up of 97% of the UK’s Insolvency Practitioners from all over the UK.
* R3 comments on a wide variety of personal and corporate insolvency issues. Please contact the press office, or see www.r3.org.uk for further information.
* R3 promotes best practice for professionals working with financially troubled individuals and businesses; all R3 members are regulated by one of nine recognised professional bodies.
* R3 stands for ‘Rescue, Recovery, and Renewal’ and is also known as the Association of Business Recovery Professionals.

See Original Article

Call now for help with corporate debts.

Call us on: 0800 071 1616

Email us on: info@debtsgone.co.uk

Website: www.debtsgone.co.uk