Almost half of North East population worry about debt
Almost half the North East population are worried about their debts, with credit card debts continuing to dominate fears.
According to insolvency trade body R3’s Personal Debt Snapshot 47 percent of people questioned were worried – a 7 percent rise compared to this time last year. Concerns about payday and short-term loans, hire purchase and store cards were also prevalent, although worries about mortgage repayments and bank loans has reduced.
These figures have been attributed to the overall fear of redundancy, which is belived to be twice as high as it was this time last year. At the start of 2011, many individuals felt uncertain about their future, which has caused them to exercise more financial caution that they would usually have done.
Linda Farish, chairman of the north east arm of insolvency trade body R3, and director of Recovery & Insolvency at Newcastle-based accountants RMT, says: “Households that are already struggling may find traditional lenders unwilling to provide further credit and are therefore drawn to short-term credit solutions.
“Individuals turning to short-term loans and credit cards should be wary of the high interest rates that often accompany these products, as overall debt can quickly snowball out of control.”
Figures also showed that over a quarter of all people are saving less than they usually do, while a fifth of consumers are putting off making big financial decisions.
Linda added: “More people have started saving and paying off their debts, so these reserves should serve them well if they do face a period of unemployment.
“Those struggling with debt should seek financial advice rather than dealing with the distress on their own.”