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LOSS OF INCOME REMAINS TOP REASON FOR DEBT PROBLEMS

Atlantic Financial Management research highlights debt troubles facing consumers

April 2014

The latest figures from leading debt solutions provider, Atlantic Financial Management, reveal that 35% of its clients cite loss or reduction in income as the reason for their debt problems, a 1% decrease compared to the previous year. In addition, 14% still admit to spiralling debt as a main cause, as they use one card or loan to pay off another. As the Government's welfare reforms take effect this month, Atlantic Financial Management continues to help UK consumers struggling with debt.

"Overall, the financial picture is unchanged with UK consumers struggling to make ends meet..."

Looking at the period from April 2013 to March 2014 and comparing it with the previous 12 months, Atlantic Financial Management reveals the top debt reasons among its clients. Loss of Income, Debt Spiral and Poor Financial Management remain the top three reasons.

Samantha Duffin, Director of Atlantic Financial Management, says, “Overall, the financial picture is relatively unchanged with UK consumers struggling to make ends meet. It's interesting to see that Increased Expenditure is a bigger issue for many people, as the rising cost of food and fuel takes its toll on householders. This could become an even bigger issue, as the government makes sweeping welfare changes.’

"Over a third of our clients say their debt woes are down to loss of earnings – significantly more than the year before..."

“Over a third of our clients say their debt woes are down to loss of earnings. In contrast fewer people cite spiralling debt or poor financial management, as reasons for their debt. This suggests that people may be managing their finances better, but events beyond their control, such as job loss, divorce and rising living costs, are adding to their money worries’

“Life changes can leave people in a financially vulnerable position, but Atlantic Financial Management offers professional one-to-one help, support and advice to those in financial difficulty. Armed with the right information, consumers can make informed choices, helping them regain control of their finances, in a realistic timeframe based upon their personal circumstances.”

TOP REASONS FOR DEBT AMONG ATLANTIC FINANCIAL MANAGEMENT CASES

Debt Reason Tax year
2011-2012
Tax year
2012-2013
Tax year
2013-2014
Loss of income 23.66 % 35 % 38.9 %
Debt Spiral 23.58 % 14 % 12.6 %
Poor Financial Management 15.45 % 13 % 17 %
Illness (Physical/Mental) 7 % 9.6 % 5.5 %
Divorce/Separation 10 % 9 % 11.1 %
Other 6.49 % 5.5 % 5.6 %
Increased Expenditure 0.2 % 5 % 2.2 %
Retirement 1.6 % 4.2 % 2.4 %
Unemployment 4.56 % 3.7 % 4.7 %