Personal debt worries of UK households
12/05/2010More British households could be left seeking debt solutions after new figures showed that their financial wellbeing deteriorated in the first three months of the year.
People are expected to suffer more personal debt worries after the Alliance Trust’s Financial Reality Index fell from just above 90 (90.5) to below 80 (77.3). It takes a rate of 100 to indicate that people’s financial problems are subsiding.
The personal financial budget section of the index saw the greatest fall, from over 120 (122.6) to just above 70 (72.2). This is due to inflation out-stripping wage rises and the price of petrol continuing to increase.
However, there is some good news, as the net wealth index rose from just below 90 (89.6) to over 120 (120.8), mainly due to house price rises.
Kevin Still, director of Atlantic Financial Management says: "Continued reductions in disposable income for those with high levels of unsecured borrowing or debt problems is a real problem, especially as interest rates on credit card debts have also continued to rise.
"Clearing debt is a priority if you are able to. For those that can't then a debt solution, like a Debt Management Plan (DMP) may be best."
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