Debt Management - Spending Power Plummets to 17 Year Low
When it comes to keeping on top of debts, the fact that the spending power of many households has been substantially diminished by soaring living costs makes the issue a particularly thorny one. According to the report in the Daily Mail, the astonishing rise in living costs means that families now have less to spend on themselves than at any other point in the last 17 years. This lack of disposable income has compounded the problems and debt management plans of many households and large numbers will seek advice from financial experts during 2008.
Debt Management - Unavoidable Expenditure
According to the report in the Daily Mail, the proportion of a household's income that is now assigned to unavoidable costs such as heating and food has skyrocketed in the last 6 years. This has left many homeowners' debt management plans in tatters, particularly in light of the increasing difficulty of acquiring a mortgage. The problem that this has led to in terms of debt management is that the amount of funds left over for ‘discretionary spending' is now at its lowest level since 1991. As such, with this incapacity to save money, the ability to make financial ends meet each month becomes ever more difficult.
Debt Management - Problems to Worsen
Debt management problems are being predicted to get worse before they get better if financial experts are to be believed. According to the report in the Daily Mail, the financial forecasters at Capital Economics expect food prices to continue to rise at the current rate of 6% for months to come. In addition to this, gas and electricity prices are being predicted to increase by as much as 10% in the second half of 2008. These astronomical price hikes are likely to cause a debt management headache, particularly for those households which are already in a financially precarious situation. Speaking to the Daily Mail, Shadow Chief Secretary of the Treasury, Phillip Hammond, states, “These figures help to explain why hard-working families across Britain are feeling worse off under Labour. Soaring prices, stagnant earnings and Gordon Brown's stealth taxes are combining to squeeze our standard of living.”
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