Tuesday, December 8, 2009
Category:
Consolidation
According to Bright Grey, Brits are under the impression that they could survive for an average of 10 months if they were to become unemployed.
However, it was found that Brits have overestimated this period by 5 months. The research indicates that the reason behind this miscalculation is that the average Brit believes their monthly outgoings to be £892, yet in actual fact the figure stands at £1,378.
Proposition director at Bright Grey, Roger Edwards, said: "From our report, it's clear that Brits are ill informed when it comes to their finances. Not only are they grossly overestimating how long they could survive if they lost their income stream, but even more worrying is that they have no real concept of what they're spending each month, making it very difficult to budget and plan effectively.
"When it comes to financial planning, most people seem to have the blinkers firmly in place. However, if they start to pull together a realistic plan now they could save themselves a lot of heartache in the future."
With regard to potential sources of finance when faced with unemployment, 43 percent are reportedly of the opinion that they could utilise their savings in order to pay the bills. However, the research showed that 38 percent of employed individuals would not be able to rely on this for longer than one month. It was discovered that 25 percent of the population are not saving at the moment, 24 percent do not possess any savings whatsoever, and an additional 24 percent possess less than £1,500 in savings.
A further 28 percent of people stated that they would turn to creditors if they were not able to pay their bills, and 13 percent admitted that they would use credit and loans. However, Bright Grey has pointed out that 33,600 credit applications have been turned down on a daily basis this year.
For 19 percent of Brits, it would seem that their plan in the event of unemployment would be to sell their home if needs be, whilst one in five would re-mortgage their property. Finally, 7 percent of Brits said that they would rely on Government assistance in order to pay the bills, and 6 percent said that they would make an application for a council house if they could not afford their bills.
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Homeowners who have previously had to turn to personal loans and credit cards to get by, could consider tying these debts up with a secured loan. One of many finance options available, a secured loan for debt
consolidation could leave the borrower with just one monthly repayment as opposed to juggling multiple commitments each month. Furthermore, this single monthly repayment could even be lower than existing outgoings – thereby freeing up useful money each month. However, when taking out a debt consolidation loan, it must be remembered that consolidating your debt may increase the amount you pay back overall and extend the repayment periods of your debts.
