Wednesday 14th of October 2009
More than seven in ten Britons (71 per cent) distrust the banking industry, new research by the Direct Marketing Association shows, so they may be interested in individual voluntary arrangement (IVA) advice as an alternative to a bank’s personal loan.
One in ten also admitted to a complete lack of trust in promotional material supplied by banks.
Distrust in banks, which provide personal loans and credit cards, may mean Britons in debt look to an IVA to help their financial situation.
The dwindling faith in traditional financial institutions is causing some people to look at new lenders, such as supermarkets.
One-third of Britons say they now receive a financial service from Sainsbury’s, Tesco or Asda, research by lovemoney.com shows.
Ed Bowsher, head of personal money at lovemoney.com, said: "Some of the traditional banks are in a very weak situation at the moment. Especially Lloyds and Royal Bank of Scotland have weak balance sheets so it’s harder for them to compete."
But while personal loan interest rates with supermarkets may appear attractive compared with high street banks, paying more than eight per cent interest on a debt could still be too much for some cash-concerned credit crunch victims.
IVAs can freeze interest rates on unsecured debts, such as credit card bills, which can ease the route out of debt.
By Neil Burton
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- 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 advice could make retirement brighter for Britons
