Wednesday 11th of November 2009
An individual voluntary arrangement (IVA) could be a preferential way of paying off debts when compared with dipping into savings, as a large number of parents are revealed to have been doing.
Research by Abbey shows that more than a third (36 per cent) of parents are using savings to keep their household going through the tough economic times.
The higher costs involved with raising a child could be to blame, as could the credit crunch and rising unemployment.
But, as one expert from the bank warns, a reliance on savings is not a healthy long-term strategy. So some people may wish to consolidate their finances with the help of an IVA now.
Reza Attar-Zadeh, Abbey’s director of savings and investments, said: "It’s vital for everyone to have a rainy day fund even more so for parents, who must juggle the need to build up a nest egg for their children’s future with the need to provide for the here and now."
An IVA could avert forthcoming financial disaster by setting up an affordable monthly repayment on unsecured debts, such as credit card bills.
By Hayley Jones
- House price rise 'may not indicate recovery'
- Equity release 'needs to be increased'
- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
- Lack of subprime lending creating need for IVA help, expert suggests
- IVA questions may help you plan for unexpected twists and turns
