Earning inequities push Brits towards loans
A substantial inequity of consumer pay is causing great difficulty for a large percentage of Brits when it comes to managing their finances, suggests one source.
One of the UK’s leading financial management charities has discovered that whilst wages in certain parts of the country are rising at a rate, which exceeds the national cost of living, the vast majority of the working population are struggling to keep abreast of it.
The charity suggests that earning imbalances are pushing more people into the red than ever before, as consumers turn to loans, credit cards and mortgage extensions as a means to meet essential living expenses such as rent/mortgage repayments, food bills and clothing costs. In addition, the charity also claims that this factor is one of the primary fuels behind the recent rise in IVA cases and new Bankruptcy hearings.
Commenting on the findings, one expert stated that more than 60% of the British population are managing their personal finances on extremely tight budgets. Increases in the national cost of living are creating tension for those people whose earnings have remained relatively static over the last few years, and it is important for the Government to recognise this problem, but even more importantly, to do something about it. Economists have suggested that a review of the minimum wage would be the most logical starting point.
