Overstretched finances lead to debt for Midlanders

Over recent years many people from all around the UK have found themselves facing rising levels of personal debt as a result of the difficult financial climate, soaring bills and inflation, and in some cases a reduction in income. One recent report has shown that many people from the Midlands are now struggling with debt and getting deeper into debt as a result of having finances that are severely overstretched.

According to the report many people from the Midlands are no struggling to make their salaries last for the whole month, leaving them with a shortfall between when they receive their monthly wage and when they next get paid. Many of these people, who are having to cope with higher petrol prices to get to work, higher food prices, soaring bills, and spiralling living costs, are having to bridge that gap by borrowing money, either from friends and family or through credit cards, overdrafts, and even payday loans.

Over the past three months around five million people are said to have taken on more debt, which compares to four million people in the previous quarter. In the past twelve months around two million people have taken on more debt specifically to bridge the gap between paydays. This data comes from the insolvency trade body R3.

An industry official from the Midlands said: “It is extremely worrying that such a large percentage of people nationally are struggling to make it to payday and I know from professional experience that this is also the case here in the region. Many local individuals are using short-term loans to cover the gap in their finances. These loans tend to have high interest rates and often those who use this type of credit find themselves in a vicious debt cycle, particularly if they experience a sudden job loss. If individuals are experiencing difficulty in meeting their financial obligations, then it is important that they seek financial advice before taking out further lines of credit.”

Tags: higher petrol prices, Midlands, higher food prices, vicious debt cycle, debt cycle, financial advice, bills, credit cards, gap

Filed under: News

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Posted in: finances,Midlanders,Overstretched