“All I want for Christmas is a debt free future” (thanks to gothick_matt)
On Saturday the Scotsman newspaper, under the headline “Debt crisis as affluent Scots are hit by cuts”, highlighted the fact that almost a quarter of the Scots that called us for help this year earned more than £20,000 a year.
They report that as the recession has bitten and redundancies and pay cuts start to pinch more people who would have borrowed their way out of difficulty in the past are now looking for help from us instead. As they say, “the recession has made it harder for them to get on top of repayments”. (Find out more on Scottish debt advice here.)
As our Head of Media and Public Affairs Frances Walker states in the article;
“People are seeing a drop in income and their debt is now recession rather than borrowing fuelled. Public sector cuts will make it worse and any rise in interest rates will create big problems.”
It’s something we’ve talked about before, in an article for lovemoney.com on the news that the Duchess of York was on verge of bankruptcy.
Middle class debt
As we said at the time, “in 2009 we advised nearly 40,000 UK clients whose total income was more than the national median pay of £25,000”. Perhaps surprisingly, over 2,000 of these clients earned more than 90% of the UK population, or over double the average UK pay, and bankruptcy was advised in 5.9% of these cases.
The fact is a debt crisis doesn’t just happen to those with low earnings – it’s not just those in poverty that succumb to unmanageable debt. It can affect those in poverty or those that a few years ago would be considered “well off”.
We always encourage people to get in touch regarding debt advice no matter what they earn.