Middle Income Earners Determined to Stay Out of Debt
New research shows a generation termed the Coping Classes are committed to shopping around and reducing their borrowings, to help them survive the effects of the recession.
The study by Friends Life revealed this group of middle income earners (£25-50k) who have been impacted by the recession, feel disproportionally affected by the public sector spending cuts, and have, as a result, an altered attitude towards debt.
Eighty four percent said they are committed to avoiding taking on any more debt in the next six months, and nearly three quarters said they are putting plans in place to pay off the majority of their debt in the next 10 years.
“We’re seeing a new kind of financial activism at play amongst the Coping Classes,” commented David Hynam, executive director, operations, Friends Life.
“We’re witnessing a slow march down the debt mountain, which will have huge implications for financial planning and for the financial services industry.”
Five years ago this generation were comfortably well off, but since the recession, their finances have been under attack from rising inflation and a fragile housing market.
The research showed 59 percent of middle income households would be unable to provide for themselves and their families for longer than six months if they lost their main source of income.
With figures indicating over half of people unemployed in the UK have been so for over six months, debt is a very real problem for many.
Staying out of Debt at a Price
Research by Scottish Widows however revealed those struggling to make ends meet in the tough economic climate are neglecting their family and loved ones as a result.
Ten million Brits admit they have sacrificed time with family and friends to accommodate overtime at work. Thirty nine percent of the population worry about neglecting their partners.