Debt misery for middle England

With news of Scottish Power increasing its gas charges by 19% and electric by 10% along with the fastest rise in food prices in two years*, households already under the strain of poor wage inflation, are facing the prospect of their cost of living rise even further, by hundreds of pounds in the year head.  Debt solutions expert Atlantic Financial Management is warning that middle income families who may have overstretched themselves and are already facing debt problems could plunge deeper into the red as they struggle to make ends meet.

Atlantic Director, Kevin Still said: “The move by Scottish Power is almost certainly going to be followed by price rises from the other energy suppliers.  The timing really couldn’t have been worse given the rise in living costs for food and fuel in the past 12 months and falling house prices in some parts of the UK.  If interest rates rise, as anticipated I fear we could see a whole new group of middle income consumers falling into a debt spiral, using one credit card to pay off another, in the hope that they will be able to keep their head above water.  All the time, the interest will be accumulating and the total debt increasing. 

“When a family has done everything they can to save costs, including switching to a fixed energy tariff, and outgoings continue to swallow up income, it’s time to start prioritising which debt to pay first. A debt management plan (DMP) can really help in this process, enabling householders to get their finances back on track.”

A Debt Management Plan from a DEMSA accredited debt solutions company such as Atlantic will work out which payments are prioritised and which can be negotiated.  Priority debts, such as mortgage, secured loans, rent, council tax and utility bills must be paid first and Atlantic makes allowances for these in the client’s monthly budget and statement of affairs.  Atlantic also negotiates a debt repayment plan for unsecured debts which are paid once the priority debts have been settled each month.

Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

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Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: England,middle,misery

Budget brings little relief for middle England

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 threat of mortgage rate rises in May.   

Director Kevin Still said: “From April, 1.1 million people on lower incomes will no longer need to pay tax. This and the decision not to lower the 40 per cent 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.   Atlantic is urging families to give themselves a financial health check to ensure they can cope with any further increases in their monthly outgoings.“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 and charges frozen on these accounts, typically credit cards, store cards, personal loans and catalogue debts.
Manchester debt firm is liquidated owing creditors over £2.2m
Wednesday 11th August 2010

Bankrupt football legend probed by police over loan fraud
Monday 2nd August 2010

Mortgage broker ordered to repay £1.5m of client money used to pay off debts
Wednesday 14th July 2010

Barclays lifts lid on banking write-offs
Wednesday 20th February 2008

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Posted in: brings,budget,England,little,middle,Relief

“Squeezed middle” facing perfect storm as share of national wealth declines

Low to middle income earners are facing a “cost of living crisis” that is reducing their living standards and preventing them from entering the housing market, according to new research from an independent think tank.

The Resolution Foundation, a research and policy organisation working to improve the lives of people on low-to-middle incomes, is to launch an enquiry into how wages and living standards for the “squeezed middle” have increased at a slower pace than the economy as a whole.

The Commission on Living Standards will investigate the pressures facing people on low to middle incomes and focus on economic trends that are changing their way of life. The foundation defines low to middle income earners as those too prosperous to draw on the benefits system but not wealthy enough to profit from private markets.

Low and middle earners are defined as those with incomes between £12,000 and £30,000 for a couple with no children and up to £48,000 for a couple with three children.

The foundation says that low to middle income earners’ wages have remained flat since 2003, long before the start of the financial crisis. The group’s share of national earnings is in long-term decline and the country’s tax and benefits system is doing little redress the balance the commission will say.

Speaking at its launch, leader of the Labour Party Ed Milliband said: “For many decades, the proceeds of growth and rising prosperity benefited the vast bulk of those working on middle incomes,

“However, over the last 20 to 30 years that once-safe assumption has broken down. While those at the top have done well, middle and low earners are no longer guaranteed the proceeds of growth. Our economy is increasingly unfair not just for those at the bottom but for many of those in the middle as well.

“The task for the future is to build a different sort of economy; a high-quality economy with quality jobs and a better quality of life. That means good jobs at good wages for middle and lower-income families. And a tax and benefit system that supports families with children, not one which is increasingly skewed against them, as we see under this government.”

The commission will look at evidence which suggests that someone at the lower end of the earnings scale will take 45 years to accumulate the deposit for a house if saving 5% of their income each year. It will also highlight the fact that some 41% of young low to middle income earners currently live in private rented accommodation compared to just 14% in 1988.

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Posted in: declines,facing,middle,national,perfect,share,Squeezed,storm,wealth