25% struggle to control finances

9 December 2008 03:53pm

A quarter of people are struggling to stay in control of their finances, with many unable to keep up with their debt repayments, research showed.

Around 25% of people admitted they were experiencing financial problems, a third of whom said their credit card repayments were now too much to cope with, according to insurer Axa.

Around 9% of people who are having money problems said they had borrowed too much and were struggling to pay their mortgage, while 6% said they had taken out a secured loan against their home and were worried they might now lose their property.

One in 20 people said they had been threatened with repossession or bailiffs and 4% admitted they were on the brink of bankruptcy or had already been declared bankrupt.

A further 7% of those questioned said they had taken out an Individual Voluntary Arrangement, under which interest on debt is frozen in exchange for a set amount being repaid each month.

The situation is being made worse by the rising cost of living and volatile investment markets which have hit the value of people's savings. Just over half of people said they now no longer had any savings left, while 15% said the value of their investments had dived.

Steve Folkard, of AXA, said: "The deterioration in people's standard of living and the effects of the credit crunch on finances are hitting people hard.

"For many people that means running out of savings or struggling to meet repayments but for some it's more serious still and can spell bankruptcy, an or repossession.

"That's why taking control of your finances is so important. People who bury their heads in the sand will find it difficult to avoid financial difficulties during a recession."

YouGov questioned 2,043 people between November 28 and December 1.

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