Loss of Income is biggest cause of debt woes

13/04/2011

Consumer debt in the UK is being exacerbated by the changing job market according to the latest analysis from EuroDebt Financial Services. According to EuroDebt, loss of income is the biggest single factor for people entering a Debt Management Plan (DMP). Over a quarter of its clients (25.4%) entered a DMP in the past tax year for this reason. Add to this Redundancy (4.53%) and Unemployment (6.67%) and overall 37.04% of clients are facing debt woes due to a change in their job status and income – factors that are in most events out of their control.
A debt spiral and poor financial management follow closely behind with 22.35% and 13.42% respectively making these issues behind 35.77% of all Debt Management Plans.
Vance Parsons, Director of EuroDebt comments, “There has been much debate and speculation about the actual cost to families for the cut in benefits, increase in taxes and rise in living costs. What is clear to us is that those that have seen their job situation change are the most vulnerable to debt problems. And with the threat of interest rate rises in coming months, things are going to get even tougher for middle income families who may have saddled themselves with large mortgages in the belief their jobs and income were secure.
“At EuroDebt our priority is to protect a client’s home and ensure that a realistic repayment arrangement is negotiated with creditors, prioritising secured loans along with council tax, utilities and critical insurance. We conduct a thorough review of a client’s income and expenditure to ensure that all debts are taken into account and a fair assessment of their living expenses is determined so that they can continue to maintain a reasonable quality of living. We can also look at where they can cut costs on banking and energy bills for example.”

Tags; Housing Debt and Bills, Income Worries and Debt, Debt Management and Banking, Job loss,

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