Low earners owe 20 percent more than they earn each year
July 18, 2011
It has been revealed in a recent report that people on lower incomes tend to owe around 20 percent more in unsecured debts than they earn each year. This includes debts such as credit cards and loans, with many lower income earners struggling to stay on top of repayments for their debts.
Whilst there are now many people who are struggling with their debts, including some middle earners, it is still the low earners that are having the biggest problems according to the debt charity, the Consumer Credit Counselling Service. Many of these lower earners have become increasingly reliant on credit cards and loans due to the financial climate, which has seen living costs soar, wages being frozen or cut, and bills rising.
The debt charity said that people who were earning less that £13,500 per year tended to owe around 20 percent more on unsecured debts than they earned annually. For example, someone earning £10,000 per year owes around £12,000 in unsecured debt, which is 20 percent more than they earn.
According to the CCCS there are also many people who are earning between £13,500 and £25,000 per years who have contacted the charity because they do not have enough money left each month to deal with their debt repayments, suggesting that the problem is also getting worse amongst those earning slightly more than lower income earners.
The Consumer Credit Counselling Service stated: “Unfortunately, these figures confirm our fears - that troubled times lie ahead for many people in the UK. This pain is going to spread wider and affect many more people than commentators previously assumed.”
Another industry group said: “Many people who scraped through the recession are going to find the next few years even harder.”
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