Many unable to save due to debt and cost of living

It has been revealed in a range of recent reports and recently released figures that many households across the UK are unable to save any money and are living off credit because of their financial situations, their debts, and the soaring cost of living, which has made their financial situations extremely difficult. It is thought that around five million households fail to save enough money and around 50 percent are worried about their debts.

The Consumer Credit Counselling Service commissioned the report and there were also figures released by the Financial Inclusion Centre showing that around 4.3 million households had no savings put aside at all whereas over 1 million had savings of less than £1000.

There are also concerns that many households could face additional risks if they are hit with unexpected costs. According to figures from the Department for Business, Innovation and Skills (BIS) around 27 percent of households with no savings put aside were relying increasingly on credit for day to day spending whilst this was true of only 9 percent of those with savings of between £1000 and £10,000.

Only 5.4 percent of those that contacted the Consumer Credit Counselling Service had any savings at all according to the charity, with officials concerned that increasing living costs and inflation could make this situation even worse. Any households have turned to higher interest borrowing to get credit, as they are unable to get credit at reasonable rates from mainstream lenders in the current climate.

One official said: ‘Households that are already struggling may find traditional lenders unwilling to provide further credit and are therefore drawn to short-term credit solutions. Individuals turning to short-term loans and credit cards should be wary of the high interest rates that often accompany these products. Overall debt can quickly snowball out of control.’

Tags: debts, climate, credit card, recent reports, GBP, Innovation and Skills, mainstream lenders, Consumer Credit Counselling Service, debt

View the original article here

Posted in: living,unable