Friday 22nd of October 2010
Individual voluntary arrangement (IVA) FAQs could be a welcome source of information for debt-ridden Brits who continue to spend big despite their lack of financial clout.
According to new figures from LV=, the amount of cash splashed on maintaining our lifestyles hit a new high this year, with luxuries and essentials taking up a rising proportion of our income.
The company's Lifestyle Inflation Index showed 35 per cent have tried to tighten their belts in other aspects of their daily lives to ensure they can still buy themselves little treats.
In August, the cost of "lifestyle essentials" rose by four per cent, ahead of the consumer price index of 3.1 per cent and more than double the rate of growth of the average increase in the nation's salaries, which was recorded at 1.7 per cent.
According to the study, 50 per cent of the population regard holidays as a crucial part of their lives, costing a total of £78 billion, while 40 per cent state meals in restaurants are vital.
Furthermore, 24 per cent need their regular nights out in pubs and bars, which racks up a combined bill of £11.1 billion, with £11.5 billion being shelled out on takeaways every 12 months.
IVA FAQs could, however, be beneficial for those who have been unable to rein in their spending elsewhere and find themselves splashing the cash now more than ever on luxuries, causing them to fall deeper into the red.
The measure might have you completely debt free after around five years of meeting a reduced-rate monthly outlay.
And it may also offer you peace of mind that your house won't be possessed if you can no longer meet your mortgage repayments, as it protects the equity on your home.
Commenting on the figures, Mark Jones, LV= head of protection, says: "The years of plenty have changed people's expectations of what's essential in their daily lives and it's clear that millions are determined not to let the credit crunch cramp their lifestyle.
"Of course this won't always be possible and I would urge people to consider now how they would continue to pay for the real essentials and at least some of these little luxuries should their circumstances change."
By Chris King
- 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
- IVAs could help you show your kids you understand the importance of money management
