Record number of people in financial distress
The number of people experiencing financial distress has increased to the highest level recorded by R3’s Personal Debt Snapshot. The latest research finds that eight million people are due to go into their overdraft this month, with two million believing that they will go into an unauthorised overdraft position. The findings also show that six million people are currently behind with some of their bills and payments – a jump of 2 million over the last quarter.
R3 President, Frances Coulson comments:
“These figures make for worrying reading. It is clear that many have found themselves in a position whereby they have to go into and often exceed their agreed overdraft in order to keep on top of their bills and debt repayments. Unfortunately, more often than not this leads to bank charges, which further deplete the amount available for bills. It’s a catch-22 situation which can result in debts snowballing.”
Five million people worry about being made redundant, however a third of people (32%) now admit that they are saving less than they used to – up 8 percent on the previous quarter; this equates to fifteen million people.
“A sudden change in circumstance such as redundancy tends to trigger insolvency so it is always advisable to put some money aside as a buffer. However, with many effectively experiencing a pay cut as living costs continue to rise, this is not always possible. With costs rising, it’s unsurprising that over a third of people (36%) believe that their financial situation will worsen over the next six months.”
“Interestingly, our research shows that 19 percent of people now set a budget. This is definitely a positive step as, for those who are struggling with their debts, a budget is a key tool which allows you to clearly compare how much money you spend against your income. This will help to identify if any savings can be saved and where.”