Is personal debt at critical levels for society’s most vulnerable?

The impact of the credit crunch has continued to be felt ever since 2008, and for the most vulnerable in society, the threat of personal debt is becoming increasingly critical. At risk groups include students, low earners, the elderly and the self-employed.

Is personal debt at critical levels for societys most vulnerable

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Serious problems in society

Research carried out by the ACCA, the Association of Chartered Certified Accountants, found that ethical lending and financial education for young people were two key priorities to halt the problem.

The vulnerable are struggling

In their report, ‘Britain’s Debt’, they warn that levels of consumer credit have been rocketing since 2008, and that worrying levels of debt are now causing significant problems for Britain’s vulnerable groups, particularly where there is an over-reliance on credit cards and diminished savings.

Changing trends fuelling debt

Digital access is also making it easier to access credit – and then get into difficulty with it. Consumers need to gain financial understanding to better manage their finances, and access to reputable schemes and products to help them get out of any existing financial difficulty. Many people have no emergency savings funds for example, so they struggle if their income disappears or lessens, or bills increase.

Remedial steps

However, for those who have already experienced financial distress, there are, happily, ways of finding a solution. Those already experiencing existing serious debt are increasingly looking at options for sorting their financial problems once and for all, and getting back onto a steady footing. Customers who look at an IVA from Carrington Dean often find that it can help them to start afresh.

With this option, people with debt can consolidate everything into a single, pre-agreed monthly payment that is affordable. They can manage everything through the scheme administrator rather than individual creditors, and can avoid more serious alternatives such as bankruptcy, or dubious schemes such as payday loans. IVA’s typically last for 5 years and bring certainty, manageability and simplification back into the individual’s life. Rather than being hassled by creditors, the scheme administrator does all of the negotiating and processing – removing a significant source of stress.

If those consumers can combine debt management and consolidation programmes with financial education on basics such as budgeting and saving, then they can enjoy a brighter financial future without worry or stress.