Friday 29th of January 2010
Individual voluntary arrangements (IVA) could be required by those households which constantly find they need to rely on credit in order to cover everyday costs.
A new report into inequality by professor John Hills shows that the household wealth of the top ten per cent of the UK stands at £853,000 or more.
The wealth of the poorest ten per cent, including cars and other possessions, is £8,800 or below. This figure could highlight how credit cards and personal loans may be relied upon, despite the interest repayments pushing people further into the red.
IVAs could prove to be the answer in preventing a situation from becoming worse, however. IVAs freeze the interest rates on unsecured debt such as credit cards.
Different repayments are also merged into one, single, monthly outgoing under an IVA, which could take some of the pressure off cash-strapped consumers.
The report says that the gaps in wealth "are associated with opportunities such as the ability to buy houses in the catchment areas of the best schools or to afford private education, with advantages for children that continue through and beyond education".
Parents who want to make their children’s futures more financially stable may decide an IVA is one option to consider, particularly as they can prevent a home from being repossessed so long as repayments are kept up with.
By Kim Parsons
- 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
- Former Manchester United footballer Keith Gillespie declared bankrupt
