Despite earning more money than the national average those
with high incomes are developing financial difficulties,
new research shows.
A study carried out by Axa reveals that about
three-quarters (72 per cent) of Britons earning at least
30,000 pounds a year are looking to cut back on their
spending over the course of 2008. Meanwhile, 15 per cent of
those surveyed state that they have been forced to get
another job or coerce a non-working member of their
household to find employment in a bid to bring in more
income. In a further attempt to reduce pressures on their
spending, just under half (44 per cent) of respondents
state they will dine out less often. Meanwhile, some 21 per
cent claim they will spend less time socialising with
friends.
Due to such difficulties with managing money, it may be
possible that consumers develop problems with making
repayments on personal loans and credit cards, as well as
meeting the cost of mortgages, council tax and household
bills.
Steve Folkard, spokesperson for Axa, said: "It's no wonder
that households with above-average incomes are struggling
to cope. A typical family in middle Britain may have a
higher than average income but millions are weighed down by
high lifestyle costs and face tough choices as the strain
on their finances takes its toll. One of the biggest issues
however is that many seemingly well off households lack the
motivation to tackle their problems. We've had it easy for
so long and been happily spending without thinking of the
consequences that now people aren't sure what to do."
He went on to report that unless such consumers take steps
to sort out their money management now, they may encounter
difficulties as they get older. Mr Folkard pointed out that
when planning for retirement people must make sure that
they will have enough money to fund their intended
lifestyle.
However, in a bid to reduce their expenditure, it was
revealed that a significant number of families could be
placing themselves under greater financial risk. An
estimated 1.1 million households are considering not
renewing their life and critical illness cover this year to
help them to cut back on their spending.
Meanwhile, a fifth of middle class Britons have either
stopped or lowered the amount of money that they put into a
pension scheme. An estimated 15 per cent of people state
they are doing this due to their need to make debt
repayments, with 30 per cent citing a lack of disposable
income at the end of the month. Overall, the rate of
inflation that middle class consumers face was placed at
5.7 per cent.
For those people who are concerned about their ability to
manage their money as the year progresses, getting a debt
consolidation loan might be of assistance. By applying for
a consolidation loan, consumers may be able to pay off
various spending demands - which could range from life
insurance costs and credit card debts to utility bills and
existing loans - quickly and effectively. In addition, the
aid with finance that such a loan provides may assist
borrowers in increasing their levels of disposable income.
Such money could then be placed into a retirement fund or
other type of savings vehicle.
Debt consolidation could also be of assistance to Britons
struggling with rising living costs. In a recent study, the
Motley Fool revealed that 93 per cent of people disagree
with the government's 2.2 per cent official rate of
inflation. The average consumer believes in actuality such
inflation stands at 8.1 per cent.
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Abbi Rouse writes for All About Loans where visitors can
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