Job loss fears haunt Debt Management Plan clients

10/06/2009

Personal income concerns driven by rising job losses are pushing higher numbers of people into debt.

New EuroDebt stats show that the single most common reason for clients signing up to a Debt Management Plan from last December to May 2009 was because of fears over income loss and redundancy.

This was the case for 28.5 per cent of clients.

Concerns over becoming locked in a debt spiral came in second place over the period, accounting for 22 per cent of cases

These positions were reversed in a similar survey conducted six months before - with "debt spiral" beating out "loss of income" by 34 per cent to 18 per cent.

Kevin Still, director of EuroDebt, said: "For a number of years the main reason for people coming to us for help has been a spiralling of multiple debts, making it impossible for them to keep their head above water.

"However, what we have seen for the first time in our latest analysis is 'loss of income' or redundancy being the primary reason for clients coming to us … This coincides with more than half of all UK workers having experienced a cut in pay, a reduction in hours or a loss of benefits since the recession began [and] reflects the huge level of uncertainty that exists about jobs at the moment."

Information from around 4,000 clients was used for the EuroDebt research.

Tags; Young Family Finances, Retirement Money Problems, Job loss, Credit Card Lifestyle,

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