Recent research by the Consumer Credit Counselling Service (CCCS) has confirmed that there is a causal link between unemployment and debt problems. The research revealed that one in eight people claiming Jobseeker’s Allowance owes nearly £15,500. Faced with few financial options, people turn to borrowing money to pay their living costs. This can mean that they are saddled with debt for many years to come.
Those who remain employed are choosing to pay off their debts rather than save, according to Moneyfacts.co.uk. This is because savings rates remain unattractive while loan and overdraft fees are very expensive. As a result, consumers are choosing to pay off credit cards, loans and other debts rather than saving for the future.
Individuals who are looking forward to retirement are increasingly dependent on the equity they have accumulated in their homes in order to top up their pensions. Whilst it may seem like an ‘emotional’ financial decision to have to make, the practice is expected to become more widespread in the future. With only just over 10% of retired people intent on downsizing during their retirement, more people are expected to choose to use equity release due to a combination of low interest rates and increasing longevity.