Full 20% of UK Citizens in Debt for Basic Living Costs
In what comes as a shock to many living today in the United Kingdom, recent research has shown that a full 1 in 5 UK citizens are finding that they are sliding deeper into debt covering their basic necessities instead of by blowing cash on unneeded things. Nearly 50% of those polled also said that they feel even worse about their finances now that they ever had at any previous point in their lives. This paints a very gloomy portrait of life in the UK even after the supposed global recession is supposed to be backing away from not just UK shores, but fading into the distance for the rest of the world, as well.
The consumer activities study was an attempt to measure the attitudes of today’s consumers in the UK and part of what the government wanted to know for the upcoming Emergency Budget. Not only are 18% of UK adults having to battle just to survive, another 14% are struggling with repayments that are difficult for them to try and make on any sort of regular basis. These are ominous times mostly because the debt is getting more expensive. Those not already in a Debt Management Program are struggling to find a way out, battling bank overdrafts, personal loan payments and even credit cards as the interest levels continue to punish their efforts to free themselves from debt. The Bank of England may have a low rate of only half a per cent right now, a truly historic low, but this does not mean that the cost of borrowing for the average consumer has gone down at all.
On top of this, job security is a dark shadow in the minds of a great number of people, making them stress out even more over what they might be able to do to try and have a secure future. The full 2 and a half million unemployed UK citizens does not bode well for those who are seeking a job. These unstable times have been getting worse with a sharp rise in the last 2 months alone, but the public sector will be laying off workers and this means even more jobs will be lost.
With half of the UK’s work force experiencing a freeze in their pay and another 20% expressing doubts about their own current job’s security, the economy is not living up to the hopes of many. Wages are not getting anywhere close to keeping pace with the levels of inflation and this continues to punish anyone with even the slightest bit of debt hanging over their heads.
If the dreaded VAT does end up rising, the cost of living will be even higher and many consumers fear exactly this, according to the recent study. After considering the possiblity that Chancellor George Osborne’s choice may be to increase the VAT, many worry that it could be very tough for them after this. Reserve cash pools are already being tapped by most UK households and this does not bode well for their ability to survive any economic dips that are almost certain to hit eventually.
Even debt charities in the UK are finding themselves underfunded and unable to help many, turning them away and causing a lot of people to be confused where they need to look next. Trying to stay afloat over the long term is certainly easier with an IVA, say most experts, simply due to the fact that short term solutions are usually what got most consumers into the tangle they find themselves in today.
