Friday 9th of April 2010
Individual voluntary arrangements (IVA) may not have been commonly sought after 40 years ago, but a new report reveals the spending habits of Brits have seriously changed since then.
The findings from the Office for National Statistics show people back up their shopping by borrowing.
IVA answers could be required by a greater number of consumers, as in the eight years to 2007, household debts shot up by 125 per cent, the Guardian cites the study as revealing.
Furthermore, in 2008 there were more credit cards than people in the UK. This addiction to plastic could be answered by an IVA, which over a five-year period can help reduce debts on credit cards by freezing their interest rates.
Interest rates can cause a massive financial headache if people do not clear their entire credit card bill every month and they can soon spiral out of control.
"By 2008, we saved less than ever before with just 1.7 per cent of total resources put away - the lowest recorded since 1970," the newspaper says.
A combination of high personal debt and low - or no - savings could lead to a debt disaster if action is not taken as soon as possible to ease a household out of the red.
By Mark Waterman
- 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 answers to help young women save?
