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Four in ten expect finances to worsen

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Almost 45% of people believe that their financial situation will worsen over the next six months – an increase of 13% on the last quarter.

According to a survey from insolvency trade body R3, less than a quarter of people (24%) believe that their financial situation will improve by the end of August.

R3 President, Steven Law said: “Since we last carried out the survey, people have seen a rise in the cost of living, from the VAT increase; to the rise of fuel and utility costs. This has happened against a backdrop of pay freezes, pay cuts and, in some cases, redundancies, so it is understandable that many are feeling pessimistic about their financial outlook.”

The research shows that the number of people who are worried about their current level of debt has increased by 6% in the last quarter, with close to half (45%) now concerned about the amount of debt they owe.

Credit card debt continues to be the main source of worry, with more than half (56%) expressing concern.

The research found that 57% of those aged 25-34 are most likely to be worried about their debts, while just 20% of those aged 65 and over are concerned about their finances.

Law added: “In my experience, most people’s debts become unmanageable due to a change in circumstance, such as sudden unemployment. This no doubt accounts for the generational split with regards to debt worries.

“In these uncertain times, for many of those of working age there is a real fear that if they do suddenly lose their job they will struggle to keep up with their debt repayments,” he explained.

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