Consumers’ recession is getting worse
The Money Advice Trust’s report into how individuals and families across the UK are dealing with the harsh economic climate shows what difficulties people are facing. It found that households are struggling to make ends meet more than in the height of the recession.
- Households are now really feeling the effects of the economic woes that swept through the country between late 2007 and early 2010. With experts predicting unemployment and cost of credit will rise, things will only get more difficult. The combination of low average earnings growth and high inflation is pushing many people to the brink.
- Many people are overly reliant on maintaining credit lines to keep afloat, reluctance to risk losing these lines of credit can lead them into further debt. This can also give people the impression they are in better control of their finances than is actually the case. People need to seek advice and consider other alternatives for dealing with their financial situation.
- It is clear that those that have witnessed the greatest downturn in financial fortunes have been those who were worse off to begin with. The poorest seem to have been hit the hardest over the last couple of years, and are subsequently having the greatest difficulty in dealing with their debts. This has forced some to cut back on spending severely.
- People suffering from a single financial blow have found it far easier to cope than those suffering from multiple blows. When money problems are compounded they become exponentially more difficult to manage. Often one problem can also cause a second, and a domino effect occurs.
Commenting, Joanna Elson OBE, chief executive of the Money Advice Trust said: “For the time being we may be technically out of recession, but the ‘public’s recession’ has never gone away, in fact it’s been getting steadily worse.
“Whilst many households have shown remarkable resilience in trying to stay on top of their finances, even selling cars and pets to make ends meet, these are not sustainable solutions.
“Instead of selling belongings or, as one man in our study did, cooking all your meals at once to reduce fuel bills, we urge people to look for expert help and support in managing their money and dealing with their debts. Free, impartial advice is available and can make a real difference.
“We see new figures almost every day outlining the extent of financial hardship across the UK; this research helps us understand the real stories behind those figures, highlighting what it means to be in that position and what a devastating effect it can have on your quality of life.
“The good news from this research is that those who sought advice are happy with the help they received. The earlier that people had identified a problem and adjusted to a change in circumstances, the better able they were to manage financially in the long term.”