The March Budget has bought some much needed relief for low income families but Atlantic Financial Management is warning that many middle income home owners are still facing stagnant wage inflation, increased living costs and the spectre of mortgage rate rises in May. Atlantic is urging families to give themselves a financial health check to ensure they can cope with any further increases in their monthly outgoings.
"... while council tax has been frozen, we must not forget that the cost of living is rising at twice the pace of wages ..."
Kevin Still, Director said: "From April, 1.1m people on lower incomes will no longer need to pay tax. This and the decision not to lower the 40% tax threshold are welcome moves. There is also help for low income families through more child tax credits as well as a pay lift for public sector workers. But while council tax has been frozen, we must not forget that the cost of living is rising at twice the pace of wages so any increase would have really hurt. There is also now increasing speculation of a mortgage rate increase in May bringing further woe for squeezed homeowner budgets. Our experience with our homeowner clients with mortgages is that they have higher levels of unsecured debts with around £35,000 being the average, where high interest rates can be very punitive.
"... many middle income families already struggling with the day to day cost of living will see little relief."
"The Chancellor's decision to axe the planned rise in fuel duty must also be welcomed but 1p is not going to make a huge difference to struggling families and small businesses. There is still some way to go before we can really say that fuel is an affordable commodity.
"What is striking about the Budget is that many middle income families already struggling with the day to day cost of living will see little relief. It is this group that is perhaps most at risk of debt problems simply because they are more likely to have higher secured credit. Mortgages, secured loans, rent, council tax and utility bills must all be top of the list when choices have to be made over who to pay first.
"This is where a Debt Management Plan (DMP) or an Individual Voluntary Arrangement (IVA) from a licensed debt solutions company such as Atlantic can help. We will work out which payments are prioritised and which can be negotiated. Atlantic makes allowances for the priority payments and any arrears on these in the client's monthly budget and statement of affairs. Atlantic also negotiates a debt repayment plan for unsecured debts and has an excellent record of getting interest & charges frozen on these accounts, typically credit cards, store cards, personal loans and catalogue debts."
To find out more about Atlantic Financial Management contact us or call 0845 0 30 30 30