Monday 6th of December 2010
Brits who are already deep in the red and anticipate their financial situation becoming worse over the coming months may decide to ask individual voluntary arrangement questions in order to ease their monetary burden.
Research published by the insolvency trade body R3 found that there has been a seven per cent increase in the number of people expecting their economic position to deteriorate in the first half of 2011, up to 30 per cent.
Steven Law, president at the organisation, said: "Since we last carried out the survey, the government has issued the comprehensive spending review … so it is unsurprising that fewer people are feeling optimistic about their financial outlook."
According to the report, just over a fifth of Brits feel their monetary situation will improve in the next six months, a fall from the 35 per cent recorded in the previous quarter.
The investigation revealed that credit card spending continues to be the main concern for individuals who are worried about their debt levels.
Almost half of people cited the amount they had put on plastic as the main cause of their money problems, while 28 per cent of the population are troubled by how far into their overdraft they have gone.
"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," Mr Law noted.
He added that many people are becoming reliant on credit cards for making day-to-day purchases and fears that this may lead to an increase in the number of Brits who are concerned about their plastic spending.
Last week, Chris Morling, managing director of money.co.uk, said there is "no doubt" that the use of the finance option could push people deep into the red if they do not manage their plastic products properly.
By Mark Waterman
