Study Highlights Many UK Households Struggling with Debt

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18th December 2012 16:24 - Financial Services

 

An online survey covering 4,000 UK households between 12 September and 2 October on behalf of the Bank of England has highlighted the fact that the poor have had their incomes squeezed more than the rich over the past year, and Britons in general are having to tighten their belts.

The market research found that 62% of households in the lowest quartile of the income bracket reported that their after-tax income declined over the past year. In contrast, 48% of those in the top quartile of earners saw a drop in their after-tax incomes.

On average, monthly pre-tax incomes across the nation fell by £43 in 2012 to £2,627. Furthermore, any minor wage increases given to employees this past year were eroded by VAT increases, higher energy prices, more expensive imports and a CPI inflation level of 2.2%.

The study discovered that a third of respondents were "somewhat concerned" about their current borrowing levels and 12% were "very concerned", with people who have high loan-to-value mortgages the most nervous.

It was also shown that 35% of UK households have had to cut back on their spending because of debt worries.

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