New data from leading debt solutions provider, Atlantic Financial Management, reveals that loss of income has been the top reason for Britons seeking help with their debts in the past 7 months. And the company believes this trend could continue as the impact of the Government's Spending Review is likely to see employers remaining cautious about pay rises or overtime in the months to come.
Results compiled from 4,600 new cases between March and September 2010 showed that 34% of people in need of debt advice cited 'loss of income' as the catalyst for their financial problems. Juggling multiple credit cards and a number of different creditors was the next biggest reason for needing debt help with 23% stating this was the main cause of their financial woes.
For 12% of respondents poor financial management was responsible. Further reasons for debt included divorce/separation (9%) mental or physical illness (8%) and unemployment (5%).
Kevin Still, Director of Atlantic Financial Management said:
"Debt is not the personal choice some consider it to be, as individuals are often left with few alternatives when attempting to balance finances in a difficult economic landscape. With the prospect of job losses in the public sector coming out of the spending review, these findings are serious cause for concern.
"We know that it isn't always easier to 'see the wood for the trees' when the debts start to pile up. So we have developed a free debt calculator to help families and individuals identify where they might need help. By answering a few questions online the calculator can assess an individual's financial health and provide actions to help prevent worsening debt problems."
The free debt calculator report, accessible here and provides advice and guidance on areas that appear problematic. The completely confidential results are displayed in a personal report unique to each user.
Kevin Still concluded:
"This is the third consecutive time in our analysis that loss of income is the primary reason for clients coming to us - financial stress and concerns over job security aren't a good mix and this is probably the case for over 10 million people in the UK. Inevitably the temptation is to borrow more to make ends meet, but that is when a debt spiral can arise that will explode if there is a major loss of income.
"It's therefore vital for those concerned about their finances to take action and our debt calculator will provide some valuable guidance"
