Posted: Tue Jun 19, 2007 1:11 pm
Unexpected bills 'lead to debt'
People in the UK are running up large debts on credit cards because they are not prepared to meet unexpected bills, a new report suggests.
Research from Abbey shows that Britons spent £48.7 billion on unexpected bills in the last year and that 79 per cent of people admitted that they had not budgeted for these unexpected costs.
Unplanned building work, unexpected taxes, bills and fees, and forgotten birthdays and weddings were all things that caused people surprise financial difficulty.
Typically, unexpected bills and costs amount to £1,375 each time, putting people in the position where they have to use their savings or go into debt to meet the cost.
Indeed, 37 per cent said that they used savings to meet these unplanned financial costs, another 37 per cent put the debt on their credit card and 13 per cent went into their overdraft.
"You never know what life is going to throw at you. However, you can prepare for the unexpected through building up a 'buffer savings fund' to help deal with these shock events," explained Abbey's head of savings, Reza Attar-Zadeh.
"Most experts recommend that you build up a fund of at least three months salary in an instant access cash account."
Recent figures from Credit Action showed that the total amount of personal debt in the UK topped £1.3 trillion by the end of April.
Source: moneyhighstreet.com
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People in the UK are running up large debts on credit cards because they are not prepared to meet unexpected bills, a new report suggests.
Research from Abbey shows that Britons spent £48.7 billion on unexpected bills in the last year and that 79 per cent of people admitted that they had not budgeted for these unexpected costs.
Unplanned building work, unexpected taxes, bills and fees, and forgotten birthdays and weddings were all things that caused people surprise financial difficulty.
Typically, unexpected bills and costs amount to £1,375 each time, putting people in the position where they have to use their savings or go into debt to meet the cost.
Indeed, 37 per cent said that they used savings to meet these unplanned financial costs, another 37 per cent put the debt on their credit card and 13 per cent went into their overdraft.
"You never know what life is going to throw at you. However, you can prepare for the unexpected through building up a 'buffer savings fund' to help deal with these shock events," explained Abbey's head of savings, Reza Attar-Zadeh.
"Most experts recommend that you build up a fund of at least three months salary in an instant access cash account."
Recent figures from Credit Action showed that the total amount of personal debt in the UK topped £1.3 trillion by the end of April.
Source: moneyhighstreet.com
Please post any news stories about IVAs here:
http://www.iva.co.uk/forum/default.asp?CAT_ID=5
See my Blog:
http://ivanews.blogs.iva.co.uk