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02/04/2010

A third of people expect their finances to worsen in 2011

A third of people (30%) believe that their financial situation will worsen over the next six months, according to a quarterly survey by R3, the insolvency trade body - an increase of 7 percent on the last quarter. The number of people who believe that their financial situation will improve has fallen from 35 percent to just 22 percent.

 R3 President, Steven Law commented:
“Since we last carried out the survey, the government has issued the Comprehensive Spending Review that announced job cuts and welfare cuts, so it is unsurprising that fewer people are feeling optimistic about their financial outlook. In many cases of personal insolvency the contributory factor is a sudden change in circumstance, such as losing a source of income, which makes repaying outstanding debts difficult. With personal debt hitting record highs and job cuts looming, many people will be feeling vulnerable.”

The research shows that the number of people who are worried about their current level of debt has remained steady, with one in four (39%) expressing concern. In the West Midlands, people are most likely to worry, with half of those surveyed saying they are worried about their debts. In London, one in four are concerned.

Credit card debts continue to dominate the concerns of those who are worried about their debts, with 47 percent saying this accounts for their worries. Of those concerned about their debts, over a quarter (28%) of people are concerned about how far they are into their overdraft. Amongst those who worry about their debts, concern about mortgage repayments has jumped 4 percent - from 19 percent to 23 percent - since the last survey.

Steven Law continued:

“I see many people who are concerned about their credit card debts as, worryingly, they rely on them for day-to-day purchases. Unfortunately, I fear that the number of people worrying about their levels of credit card debt is set to grow.

“The jump in the number of people worrying about their mortgage repayments may be due to the fact that, typically, the value of a mortgage repayment tends to be higher than the monthly repayment on a credit card. The higher value of this debt may make a mortgage repayment seem more difficult to pay each month. Many may be concerned that their repayments will increase when interest rates start to rise. People who feel that they are struggling with their personal debt should seek professional advice on managing their household budget as soon as possible.”


Methodology note: ComRes surveyed 2035 adults online on behalf of R3 between 29th and 31st October 2010. Data were weighted to be representative demographically of all GB adults. Where population figures are mentioned, estimates have been extrapolated using the percentages from the results and adult population figures for Great Britain available from the Office of National Statistics.


R3 Press Office

Notes to editors:

  • R3 is the trade body for Insolvency Professionals and represents the UK’s Insolvency Practitioners.

  • R3 comments on a wide variety of personal and corporate insolvency issues. 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 recognised professional bodies
     
  • R3 stands for 'Rescue, Recovery, and Renewal' and is also known as the Association of Business Recovery Professionals.