Friday, May 20, 2011
Category:
Consolidation
According to the latest Aviva Family Finances Report, families are struggling to save in the face of inflation and unsecured debt. The report, which was undertaken to gain an understanding of the financial needs of customers who live as part of a family, also revealed that the next six months are causing ‘major financial concerns’ for families.
Findings have shown that the savings and investments of a typical family now stand at £1,163 (not including pensions or property), compared to £849 in January 2011. The amount of money saved each month has reportedly increased from £22 to £32. It was also found that the number of families with no savings has dropped to 28 percent, from 33 percent in January 2011. In addition, the number of families that are not setting any money aside each month has reportedly fallen to 37 percent, from 40 percent in January 2011.
Nevertheless, the average unsecured debt has increased to £5,878, from £5,360 in January 2011. It is thought that this trend is primarily driven by families with children. In fact, the research revealed that the average unsecured debt of families with two or more children has increased to £6,200, from £5,248 in January 2011.
Furthermore, the Aviva Family Finances Report has revealed that the cost of servicing debt as a percentage of household income has increased to 10 percent, from 8 percent in January 2011. It has been pointed out that figures indicate that this may be a sign of servicing increasingly expensive borrowing as opposed to a desire to pay off unsecured debt.
It has been reported that expenditure on virtually all of the basic family costs is increasing, which is causing most families to have ‘significant worries’ regarding what the next six months has in store. A significant rise in the cost of basic necessities was found to be a worry for 60 percent, whilst 39 percent are concerned about unexpected expenses, and 20 percent are worried about an increase in mortgage rates.
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Homeowners who would like to get their finances in order could consider taking out a secured loan to tie up any existing debts that may be proving expensive each month. One of many finance options available, a secured loan for
consolidation could allow borrowers to reduce their monthly outgoings, thereby freeing up useful money each month. This extra money could potentially be set aside in a savings account if desired. However, if opting for a secured loan to consolidate debt, it should be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
