Recent Job Losses Force People Into Debt Problems
Saturday, Nov 13, 2010 9:12 am
A report published this week by insolvency trade body R3 has revealed the state of people's finances in Scotland. Worryingly, the report concluded that over 1 in 4 Scots would be unable to make bill repayments after just a single month if they were made unemployed. In addition to this, a further 57% claimed they would begin to default on bill repayments within six months of losing their jobs and potentially have further debt problems.
These figures were reported just days after a leading think thank put over 100,000 jobs in Scotland at risk.
In addition to this figures, Shelter Scotland has warned that tough government cuts - most notably last month's 40% reduction in the rate at which support for mortgage interest is paid to struggling homeowners, could lead to an increase in debt problems and repossessions in 2011.
Shelter also warned this week over the potentially serious effects of rising unemployment in Scotland. Figures suggest that up to one in six UK households are having problems making mortgage repayments. A great number of Scots also were reported as being either "worried" or "very worried" about paying their full mortgage repayments every month.
The R3 research also concluded that around 16% of Scots who are currently in employment have unsecured debts between £5,000 and £10,000, and 5% with debts of £25,000 to £50,000.
Many analysts believe that the recession could have a big impact on Scotland as the reliance on public sector employment is greater than the rest of the United Kingdom.