Debt Advice Help and Support

Squeezed middle to consolidate debt? (25 Jan 2012)

Middle income earners could be facing long-term financial problems due to the falling incomes many are grappling with – and these could be addressed if they consolidate debt.

 

An IVA is an alternative to bankruptcy and can help people who owe more than £12,000 in unsecured debt to a number of lenders.

 

The IVA will reduce repayments to more manageable levels to be paid off over the course of five years, after which, any remaining debt is wiped away.

 

A new report from the Resolution Foundation has anticipated that lower and middle income families earning between £12,000 and £41,000 a year, are unlikely to see their earnings return to pre-recession levels until 2020.

 

Max Wind-Cowie is head of the progressive conservatism project at Demos.

 

And he argues that the 'squeezed middle' are "increasingly unable to build up assets – a real problem that's emerging".

 

People on very low incomes are already compensated through the state, tax credit, income support and other benefits – but middle earners can be more vulnerable to cuts.