Personal Debt in an Improving Economy
The travails of personal debt
Personal Debt is the subject of the following guest post from a financial writer looking to discuss the particulars of how the changing economy affects those holding debt.
Earlier this year, there were a few signs that the UK’s job
market was about to experience some much-needed growth. Today, the number of
people out of work has now dipped below the 2.5 million mark, giving many
hopeful job-seekers reason to believe that there may be good news just around
the corner, but all isn't completely rosy just yet.
Despite the fact that the UK economy as a whole is starting
to slowly rebound after the downturn which lasted from 2007 until the end of
last year, personal debt remains a massive problem, especially for those on low
incomes. Among those most likely to find themselves with debt to pay off are
low-wage workers, part-time workers and anyone who is long-term unemployed.
Homeownership affects debt levels
One of the main indicators of whether or not someone is
likely to get into debt is income, but home ownership can also have a profound
impact on the likelihood of someone’s finances being in the red. A study from Bankruptcy.org.uk revealed
that there was a sizeable disparity in incomes between home owners and
non-home owners in favour of the former group.
Typically, home owners earn £900 per month more than those
who don’t have a place to call their own. However, more of that money is likely
to go on mortgage repayments than debt, as well as taxes such as stamp duty
which home owners tend to be lumbered with. As mortgages tend to be pretty
expensive, home owners are likely to have more debt, but it’s usually
manageable.
Low incomes mean more problems?
The study also revealed that, of the people coming to them
for debt advice, just 23% were home owners, and that, on average, non-home owners
spent 88% of what they earned. Although that’s a pretty high figure, it’s lower
than the same statistic for home owners, who typically spend up to 97% of their
income each month.
Nevertheless, it seems that non-home owners are more
vulnerable, especially when it comes to repaying certain types of debt such as
loans or overdue bills due to the likelihood that they earn less. To learn more
about how home owners and non-home owners differ when it comes to personal debt,
income and dealing with debt, view the full results by clicking here.
Interested in guest posting or writing a sponsored post? Feel free to send me an email (mrmoneybanks<at>multimillionaireroad<dot>com), find me on twitter @millionairer0ad or comment.
Post a Comment