Wages are not increasing to match the cost of living, and reports suggests that even when we do have better wages, we are still worse off as debt management becomes a reality for many of us.
According to the Daily Mail, even if you've had a pay rise or are better off than your parents, today's workers are increasingly worse off. Disposable incomes for families have dropped due to the rise in tax, increase in utility bills and household expense. Debt management strategies are becoming more prominent for families throughout the UK.
Debt management and the affordability tight rope
The paper reported that despite increasing incomes across the UK, average homes have less disposable income as more money goes on tax, national insurance and pension contributions, as well as utility bills and council tax. Inflation and indirect taxes have been blamed, as well as a whopping 10% rise in many mortgage repayments thanks to increased interest rates. Debt management strategies are crucial for many families fearing they are walking an affordability tight rope.
Urgent debt management strategies
The loss of disposable income has been noticeable in the high streets and retail sector as many major firms from Tesco to M&S have reported lower sales than projected. Food prices have also risen by an estimated 4%, as well as an increase in the cost of fuel and energy bills. Once the cost of living, inflation rises and interest rates have been factored in, it's been calculated that earner's are now in fact worse off, even if they have had a 4% pay rise in earnings over the year. For those who think they are better off, this can be dangerous – it could lead to over-spending and result in the need of urgent debt management strategies.
Gap between rich and poor widening
It appears that more middle earning families could be in need of debt management to help dig them out of overspending, even if they aren't going on expensive holidays or lavishing money on excess and luxury. But the impact of inflation, interest rates and tax is really being felt lower down the financial scale. The struggle to keep afloat in an increasingly expensive society is problematic for lower earning families as the gap between Britain's richest and poorest is wider than it's been for forty years according to a survey by the Joseph Rowntree Foundation.
Debt Management Solutions with Varden Nuttall
Varden Nuttall has been established for over 15 years and is dedicated to helping people in financial difficulty find a debt management solution through an Individual Voluntary Arrangement (IVA). Employing 90 people, including trained and skilled IVA administrators, we are one of the largest IVA companies in the UK and handle over 3% of all IVA applications. To find out more about the company, or to make an appointment to talk about putting an IVA in place, call us today on 0800 031 9802 or fill in our online enquiry form.