Jobless figures mask reality of households struggling on reduced incomes

Friday 15th July 2011

The latest job market figures have revealed a startling rise in the number of families struggling on reduced incomes because they can’t find full-time work.

The figures follow a recent report suggesting that increasing numbers of workers are being forced to take pay cuts or ‘downbanding’ of their jobs or face redundancy.

With loss of income the top reason why people enter Debt Management Plans (DMPs), debt solutions specialist and DEMSA member Atlantic Financial Management is warning that while the headline jobless figures look positive, the underlying picture is much more worrying for families across the UK.

The ONS figures have revealed that the number of employees and self-employed people working part-time because they could not find a full-time job increased by 80,000 in the three months to May 2011, on the previous quarter to reach 1.25 million, the highest figure since comparable records began in 1992.

This rise is also echoed in the number of people claiming Jobseeker’s Allowance (JSA) which has risen by 24,500 in June – the highest increase in two years. Redundancies have also risen by 16,000 over the quarter.

Kevin Still, Director for Atlantic, said: “While the overall figures show a reduction in unemployment, when you dig below the surface there’s clearly a growing number of people tackling a loss of income either because they can’t find full time work, or because they have had an enforced pay cut or have been ‘downbanded’.

“When you look at this combined with the rising costs of day to day living – utility bills, food costs and fuel for example – the challenge of balancing reduced income against rising outgoings is becoming a real issue for many UK households.”

He explained that people often turn to their credit cards in order to manage the rise in costs, which can often lead to a debt spiral.

“It’s at this point that household need to start prioritising debts and a Debt Management Plan (DMP) from a DEMSA accredited debt solutions provider such as Atlantic can prove invaluable in this regard.

“A new schedule of payments can often be negotiated with all the creditors and will ensure rent, mortgage, energy, critical insurances and council tax bills get paid before other unsecured debts,” he added.

"Atlantic Financial Management offers a range of debt solutions including Debt Management Plans (DMPs), IVAs, Protected Trust Deeds and Bankruptcy advice and its expert legal support team prioritises dealing with any court actions an individual or household may be facing.

"It also offers a number of money saving tools including energy switching and a prepaid current account," Mr Still said.

He explained the process individuals can go through in order to find the best debt advice for their circumstances. "Debt Advisors will confidentially discuss an individual’s financial circumstances over the phone and provide initial debt advice without obligation. Once they know more about the current financial situation, the best debt solution for their circumstances will be recommended.

"If a Debt Management Plan is chosen, Atlantic will then complete a statement-of-affairs, from which it can work out which payments are prioritised and which can be negotiated. Priority debts, such as mortgage, secured loans, rent, council tax, priority insurances and utility bills must be paid first and Atlantic makes allowances for these in the client’s monthly budget and statement of affairs."

Mr Still revealed that Atlantic’s business model is based upon very early contact with a client’s creditors to advise them of their appointment and to commence the debt repayment negotiation process at the earliest point possible.

Atlantic is licensed to use the Common Financial Statement, which is widely accepted by creditors and their collecting agents. "Part of the Atlantic model is to look at benefit entitlements and ways of optimising income," he concluded.

To find out more about Atlantic Financial Management visit www.atlanticfinancialmanagement.co.uk or call 0845 0 30 30 30