Monday 14th of September 2009
Individual voluntary arrangement (IVA) advice could be needed by some Britons after new research reveals that for every £1 saved, 26p is borrowed.
The survey for Unbiased.co.uk shows that this is in contrast to the second half of 2008, where £1.61 of debt was repaid for every £1 saved.
With more households turning to credit, they could soon find their finances fall further into the red and need pulling back to black with an IVA.
In the second quarter of 2009, £5.5 billion was borrowed, almost double the amount taken out in the first quarter.
An IVA can, however, merge monthly financial commitments into one more manageable repayment, which could give the push Britons need to stop relying on unsecured debt as a financial crutch.
David Elms, chief executive of Unbiased.co.uk, says 2008 "prompted a dramatic retreat from savings in favour of repaying personal debt. The first half of 2009, in contrast, has seen consumers head back down the debt path as they shift back into borrowing".
The Consumer Credit Counselling Service recently noted that unexpected unemployment plunged many households into debt, some of which may have been in the black before the recession and now need IVA help.
By Kimberley Parsons
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- Need for IVA help could increase as expert predicts reduction in lending
- Government announces 'breathing space' for those needing IVA help
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- IVAs could get the saving wheels in motion
