33 per cent of those with money worries are fearful they’ll default on repayments on their home.
With interest rates rising and house prices levelling off, five per cent more people were worried about making repayments this quarter than last. Nearly half (49%) of the 35-44 year olds quizzed admitted to repayment fears.
The research from CPP states that the second most feared payment was council tax, with 20 per cent of people questioned stating it as a primary concern. Of those questioned 18% of 16-24yrs were worried about the payment of council tax bills but more alarmingly this figure rises to almost half (47%) of those aged 55yrs and above.
On consumer behaviour the research indicates that consumers are now facing a credit hangover as fear of failing to make credit card repayments reaches an all-time high. 13 per cent of people cited not making credit card repayments as a major concern, the highest level since the CPP Financial Health Index started three years ago.
With spending on plastic overtaking cash for the first time in 2004 During December 2004, spending on plastic cards reached £269 billion for the year, overtaking cash payments, which were around £268 billion – Association of Payment Clearing Services (APACS 31.12.04), it is no surprise that mounting credit card debts have registered as one of the top concerns facing consumers. But Shirley Woolham, Head of Financial Health at the CPP Group, suggests evidence points to a society of ostriches when it comes to personal finances. The study reveals that consumer fear of debt has decreased by almost half of what it was last year.
“There is a significant ten per cent fall in the number of people who admit to having money worries. Only 17 per cent claimed to have concerns about meeting all their short-term financial commitments, which is one of the lowest results we’ve seen in the last three years. This either means we’ve all suddenly got richer, or we’re burying our heads in the sand when it comes to facing our finances,” she explained
The insights contrast the recent announcement that bankruptcies are at an unprecedented level. The number of people unable to pay off their debts last year reached 35,898 The Independent, 16.02.05, the highest level since records began, comfortably beating 1992's figure of 39,794 personal insolvencies.
Woolham added: “The bankruptcy figures suggest that people have borrowed to their limit and are vulnerable to even a modest rise in interest rates or a change in their personal circumstances. With base rate movement unpredictable, it is important that consumers stay in control of their finances and consult a professional for financial help rather than pretending the problem doesn’t exist.”
