Thursday 8th of October 2009
Big spenders who have been affected by news that one-third of British companies are to freeze pay might want to consider an individual voluntary arrangement (IVA).
Some workers may depend on an annual pay rise and budget in preparation for it.
There may also be those who are relying on a bigger wage packet next year to meet interest payments on unsecured loans.
John Grange, a Business Link adviser, admits that pay freezes "have to be seen as part of a bigger strategy within business" and warns that they could be here to stay.
An IVA will seek to repay all unsecured loans over £15,000, so could be ideal for Britons who have splashed out on credit cards but are now facing the prospect of a static salary.
IVAs are typically in place for a period of five years, meaning they may be attractive to those who believe they could ride out the rest of the credit crunch with one.
The Office of National Statistics revealed this month that Britain’s employment rate has fallen to 72.5 per cent.
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
- IVAs may help the financially insecure drop their debts
