Brits 'expecting incomes to drop in 2009'

18/02/2009

One in three Britons are expecting their disposable income to drop this year, as job cuts increase and the economic downturn continues.

The poll from Virgin Money also showed that a similar number plan to save less and give up holidays, plugging their income shortfall.

Meanwhile, 42 per cent told the pollsters that they would scrap their spending on luxuries entirely.

EuroDebt director Kevin Still said: “These figures mirror our experience, where 1 in 5 of the people joining a EuroDebt Debt Management Plan in 2008 cited loss of income or redundancy as the primary reason for starting a plan. Loss of income combined with rising household expenditure on non-luxury items is affecting millions of UK households.

"In our past experience there was a nine month lag between people recognising they have serious financial problems and taking professional advice. That time lag is now reducing as the impact of loss of income and no savings means that very few households with financial problems can cope for more than a couple of months."

Rob Clifford, UK managing director of Virgin Money, added: "The economic outlook may look bleak and consumers are now familiar with harbingers of doom on a daily basis.

"We cannot trivialise the effects of the economic downturn… it is clear there is a mood of caution throughout the country."

Official government figures have shown that the UK entered recession at the end of last year.

The economy is also predicted to continue shrinking throughout 2009, putting pressure on salaries and forcing some firms to make staff cuts.

Tags; Income Worries and Debt, Young Family Finances, Recent Graduate Debt,

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