Pay rises ‘can result in debt’
Increases in salary can result in people getting into increased levels of debt, according to new research.
A survey published today by Prudential suggests that around 3.4 million Britons end up in the red by spending the rewards of a pay rise before they have actually received it.
The same was found to be true of bonuses, with millions of consumers admitting finding themselves in debt by spending such cash in advance.
Research by the firm suggested that some 17 per cent of the UK adult population admits to such risky financial behaviour.
Prudential’s business insurance director, Angus Maciver, said: “Pay rises and bonuses ought to be the answer to most people’s financial prayers but in many cases they appear to be putting people further into debt.
“A pay rise or a bonus ought to be the trigger to get debt under control but too many of us simply see it as an excuse to spend more.”
Earlier this year Prudential released research indicating that more than half of Britons’ wealth is tied up in property - a figure predicted to grow by five per cent if current trends continue.
People concerned about the level of their debt, but wishing to investigate an alternative to bankruptcy, may wish to consider an individual voluntary arrangement.
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