Millions facing financial meltdown

A quarter of the population is facing financial meltdown with many of the effects of the credit crunch to blame, according to research from AXA's My Budget Day campaign.

According to AXA over 3.7 million people who are struggling to control their finances are failing to cope with mounting credit card bills and 1.02 million people have borrowed too much money and can't keep up with mortgage repayments.

And AXA warns that some are facing worse problems with over three quarters of a million people saying they have been forced to apply for an Individual Voluntary Arrangement and around half a million threatened with the bailiffs, or worse, repossession.

Some 6.1 million people have no savings left at all and around 1.7 million people say their investments have all but disintegrated thanks to the credit crunch.

According to AXA, in all some 11.6 million people (25 per cent of the adult population) are said to be struggling financially with a significant number - around 1.3 million people - admitting their finances are entirely out of control.

The statistics have been published to coincide with the launch of AXA's My Budget Day website, which provides consumers with a series of online tools designed to help them take control of their finances in just one hour each month.

Steve Folkard of AXA's My Budget Day said: "The deterioration in people's standard of living and the effects of the credit crunch on finances are hitting people hard. For many people that means running out of savings or struggling to meet repayments but for some it's more serious still and can spell bankruptcy, an IVA or repossession.

"That's why taking control of your finances is so important. People who bury their heads in the sand will find it difficult to avoid financial difficulties during a recession. The more aware you are of your problems and the more in tune to your financial situation you are, the better your chances of coming out the other end in good shape."

AXA's My Budget Day campaign is aiming to help the nation overcome financial apathy by encouraging people to take the simple step of dedicating an hour every month to reviewing their finances. The campaign centres on a suite of online financial planning tools (axa.co.uk/mybudgetday) which have been developed to help people manage their finances better through the impending recession, and beyond.

Steve Folkard added: "The average person can make a real and tangible difference to their financial situation by spending just an hour a month taking stock of their finances. This is the essence of the My Budget Day campaign. It is simply providing good guidance and we've made the process even easier for people by developing a range of online tools that provide straightforward stepping stones to financial control."