Low earners 'much more vulnerable'

The recession has had a significant impact on low earners across the UK, making debt management a more serious issue for those on less money each month.

Speaking at the Northern Money Conference 2010 at the Contemporary Urban Centre in Liverpool on March 1st, Sophia Parker, acting director at the Resolution Foundation, said people on lower salaries have less room for movement when it comes to their finances and as a result, any changes in their working patterns have far-reaching impacts on their ability to handle debts.

"What we are seeing in the recession is that low earners are more exposed to losing their jobs. We also found that if they do lose their jobs, they find it much harder to return to the labour market," she commented.

According to research by uSwitch.com, more than half of the UK workforce (16 million people or 57 per cent) do not believe they will receive a salary increase in 2010.

Furthermore, nine million workers do expect a raise but feel it will be below the consumer price index rate of inflation of 3.5 per cent.

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The cost of making phone calls from landlines has increased, one organisation has said, which could affect those struggling with debt management.

A quarter of Britons are worried about the possibility of a rise in the base rate, according to one study, which could negatively affect those with debt management problems.

More people could face bankruptcy as unemployment rises, it has been claimed.

Cuts to housing benefits will affect hundreds of thousands of people, one organisation has claimed, which could include those struggling with debt management.

Anyone looking to remortgage their home to deal with debt management issues may struggle because of the falling house prices.

People claiming Jobseeker's Allowance are finding it difficult to keep on top of their debt management responsibilities, it has been claimed.

One of the signs a person may be struggling with debt management is that they only ever make minimum repayments on their credit card, one organisation has said.

Debt management problems in the UK could still be prevalent after new figures from the Bank of England showed record amounts of write-offs for credit cards.

There was an increase in the number of people looking for debt management advice from Citizen's Advice Bureaux in the first three month of 2010.

Filing for bankruptcy in cases of financial difficulty may not necessarily always be the easy option.