Rising demand for debt management help
The recession has had a significant impact on how people manage their finances, according to a national debt report published recently.
For some people it has been the wake-up call they needed, but for others it has simply made matters worse, according to Payplan, one of the UK’s major providers of free debt solutions.
The ‘Consumers’ Attitude Towards Debt’ report published by leading independent researcher Mintel in July found that 39% of people interviewed are now more careful when it comes to spending money, citing the recession as a welcome ‘wake-up’ call.
But in contrast, almost half of those describing themselves as ‘not very financially organised’ admit the recession hasn’t changed their spending habits, it’s simply hampered their ability to gain credit for future borrowing.
For those already teetering on the brink of debt this doesn’t bode well, say Payplan, fuelling concern that debt problems are likely to continue to rise as the recession unfolds further.
The national free debt solutions provider has seen a dramatic rise in requests from consumers for free debt management plans to help pay off debt. A 20% increase was recorded in 2009 and calls to Payplan’s helpline and online service in the first half of 2010 indicate this rate is continuing upwards.
Managing director John Fairhurst said: “Demand for debt help in the UK continues to escalate. And while the recession has led to a debt ‘detox’ for some, for others it has simply served to exacerbate the situation further.”
This week Payplan issued a warning to consumers experiencing financial difficulties to tread carefully when seeking help – or they could end up owing more money!
“Consumers may unknowingly be charged up to £100 a month in fees in some cases,” added Mr Fairhurst. “This not only increases the debt to be paid off, it means it’s likely to take even longer to clear.”
Free debt management plans are available if consumers do their research properly, say Payplan. And consumers shouldn’t be put off as they are simple to set up, easy to follow and are likely to represent a better alternative to borrowing more money.
“A debt management plan puts an individual back in control. It allows people to pay their debts at a rate they can afford while impartial representatives like ourselves remove the stress by dealing direct with the creditors. With only one payment to make and a realistic chance of getting interest and charges frozen and no fees taken out, debts can be repaid as quickly as possible,” added Mr Fairhurst.
For details of how to set up debt management plan with Payplan, visit: payplan.com
