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DAC Scotland: address any money worries now

Responding to worrying predictions about increasing Scottish unemployment, DAC Scotland reminds readers of the importance of tackling any money worries they may have.

by Melanie Taylor Thursday, May 24, 2012

For people with money worries, the time to address them is now, says DAC Scotland, stressing the potential dangers that lie ahead for many Scottish residents. The warning comes in response to a recent report that predicts rising unemployment across the country.

The report, from the Centre for Economics and Business Research (Cebr), indicates that unemployment will keep rising for the next five years in every part of the UK except London, the South East and East of England.

Worse still, the report picks out Scotland as one of the worst-affected regions. Heavily reliant on the public sector (which employs almost one in four workers in Scotland), it's particularly vulnerable to the expected Government cutbacks.

Looking ahead, the Scottish jobless rate is expected to rise from 8.1% today, passing the UK average this year and climbing to 9.7% in 2016. The last time the rate was higher was back in 1993, before many of today's younger workers were even born.

"These figures point to a very real danger for households across Scotland," a spokesperson for Debt Advisory Centre Scotland commented. "When a family loses a source of income, their finances can go from bad to worse more quickly than they ever expected. Monthly payments they can cope with today can easily become completely unaffordable - particularly if the person who's lost their job is the main or only breadwinner.

"No-one ever knows what the future holds, but this prediction from the Cebr underlines why this a particularly worrying time for people across Scotland."

So what can be done? With rising living costs and low pay rises already making life difficult, what can a household do to 'prepare for the worst'?

The DAC Scotland spokesperson continued: "A good way to prepare for an uncertain future is to focus on paying off debt and building up savings - in that order.

"It rarely makes sense to put money away for tomorrow when debts are accruing interest today. Figures from the Bank of England show that the average overdraft rate was over 19.5% in May, while the average instant-access account paid just over 0.2%, so someone with equal amounts of debt and savings will almost certainly see their debt growing far faster than the money they've saved.

"It's always a good idea to reduce your debt levels, but today's economic climate - and predictions of worse to come - will mean many people are feeling a greater sense of urgency than usual."

The other side of preparing for the worst, of course, is hoping for the best. That scenario of 9.7% unemployment still means the vast majority of Scots won't lose their jobs - but even so, reducing their debt levels will set them up for a bright future.

"And some people will inevitably end up with bankruptcy as the best - or only - answer to their debt problems," the spokesperson concluded. "We would like to remind people of the LILA [Low Income, Low Asset] route into bankruptcy. This was only introduced in April 2008, so many people who need to enter bankruptcy might not be aware that the LILA route could help them do so. As the name says, it's specifically designed to help people on a low income and with few valuable assets."

-ENDS-

Notes to Editors
Debt Advisory Centre Scotland provides debt help and advice to Scottish residents. It's part of the Think Money Group, which is one of the UK's leading financial solutions providers and delivers a comprehensive range of financial services, including debt, insurance and banking solutions.

For more information, visit the Debt Advisory Centre Scotland website at
http://www.dacscotland.co.uk.

Contact:

Melanie Taylor
Debt Advisory Centre Scotland
Melanie.Taylor@dacscotland.co.uk
Tel: 0845 056 6480

Debt Advisory Centre Scotland provides debt help and advice to Scottish residents. It''s part of the Think Money Group, which is one of the UK''s leading financial solutions providers and delivers a comprehensive range of financial services, including debt, insurance and other financial solutions. Debt solutions are subject to conditions and acceptance. Your credit rating may be affected. Fees are payable if continuing services provided. Repaying debt over longer may increase the amount to be repaid. For more information, visit the Debt Advisory Centre Scotland website at http://www.dacscotland.co.uk. Contact: Melanie Taylor Debt Advisory Centre Scotland Melanie.Taylor@dacscotland.co.uk Tel: 0845 056 6480

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