Financial pressure on households 'will not decrease in near future'
By Sam Gooch
Feb 8, 2011 - 8:02:06 AM
Pressure on families is not going to decrease soon, an expert has
said.
Increased levels of pressure on personal
finance options such as current accounts and credit cards will not improve significantly in the
near future due to several factors, an expert has said.
According to Mark Bower, managing director of online
resource Money Maxim, issues such as the rise in VAT from 17.5 per cent
to 20 per cent - which was confirmed on January 4th 2011 - and the
ongoing effects of the government's spending cuts will serve to
impact on the financial wellbeing of families up and down the
country.
Since coming to power following the
general election in May last year, the Conservative-Liberal Democrat
alliance has pledged to knock billions of pounds off the UK's
public spending bill as the nation attempts to recover following the
global economic downturn.
This may mean that
consumers should consider trying to put more of their income into savings accounts in order to provide some
security for their future, but Mr Bower suggested that this may prove
difficult because the tightening of credit has put additional pressure
on household expenditure.
"As food,
utility and other household bills have recently increased month-on-month
those without a savings base have found themselves living from day to
day and even less able to save for larger bills or purchases even in the
short term," he explained.
The expert
was speaking after research by the Co-operative and Shelter published
earlier this week (January 25th 2011) showed that nearly 28 per cent of
Brits are having to spend more money each month than they have coming
in.
Mr Bower added: "In the past they
probably relied on credit, but with that both more expensive and in
shorter supply, that has made smoothing the annual budget across the
year more challenging."
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