Economic recovery failing to fix fragile household finances

[Legal Beagles]

The UK economy is growing, yet StepChange Debt Charity is approached by more than a thousand people every day who are struggling to deal with their finances.

Millions of households’ finances are so fragile that that they are weeks away from falling into a spiral of debt if they faced a drop in income or a cost they can’t afford, according to a major new report Life on the Edge, released today by StepChange Debt Charity.

15 million people are already falling behind on bills and using credit to pay for essential costs 13 million people do not have enough savings to keep up with essentials for a month if their income dropped by a quarter.

Those on average income, families with children and people in full time work are most at risk of falling into debt

A national strategy is needed to help households avoid problem debt, including: measures to boost personal financial resilience; strong and responsive safety nets; and a formal role for creditors in helping those in financial difficulty

http://www.stepchange.org/Mediacentr...dFinances.aspx

• 15 million people report one or more signs of financial difficulty – such as falling behind on bills, using credit to last until payday, or using credit to keep up with existing credit commitments.
• Those on average income, families with children and people in full time work are most at risk of falling into debt
• People who’ve seen their essential bills increase in the last year are more than twice as likely to be showing signs of financial difficulty.
• People who’ve experienced financial shocks – such as losing a job or losing hours at work - are almost three times as likely to be showing some signs of financial difficulty.

Our research found that millions of people are simply unable to cope with changes to their finances – whether increased costs or a drop in their income:

• 13 million people do not have enough savings to keep up with essentials for a month if their income dropped by a quarter
• Only 1 in 10 believe that welfare support would be enough for them to meet essential costs.

[Amethyst]

Re: Economic recovery failing to fix fragile household finances

Policy suggestions from the report

Building resilience by:
• cutting living costs
• a plan to raise low wages
• smart incentives for low income savers
• affordable credit

Ensuring a strong safety net by:
• ‘debt-proofing’ Universal Credit
• a Safety Net Promise from essential service
providers and creditors, with breathing space and no
interest and charges for people making an effort to
pay their debts
• debt advice on steady footing to help people access
the support they need when they fall on hard times

[meellis]

Re: Economic recovery failing to fix fragile household finances

Thankfully WE ARE ALL IN THIS TOGETHER but they seem to have missed that part out on the report. I personally find it difficult to believe any of these reports now they all accentuate what they want to get across. The IMF are saying we are going to be the fastest growing economy for a while because we have been bolstered by car sales and the like. I live between Swindon and Oxford so I would like to tell the people who are being laid off by Mini and Honda that they are selling more cars so there should be no need to cut back on production.