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Consumers Have 'Fear' Over Finances

Aug 18, 2007
Millions of Britons suffer from 'money fear', according to a new study. Figures released by Sainsbury's Bank indicate that 2.8 million consumers, some six per cent of the population, purposefully ignore their financial situation - which in turn may cause them to fail to make repayments on personal loans, credit cards and utility bills.

Head of channels for Sainsbury's Bank Kevin Barrett said: "Our research indicates that nearly two million people refuse to discuss their finances with their partners because they're worried about how they'll react." The study also revealed that some 11 per cent of consumers have left a bank account or credit card statement unopened at some point in their lives.

However, Mr Barrett claimed that failing to keep track of your financial situation can not only increase debt problems for borrowers but also leave consumers open to other areas of risk. "For example without regularly monitoring your statements you won't be able to identify issues such as identity theft," the industry expert advised. As a result, the financial services firm advised that those concerned about their debt management should create a budget and "stick to it". "Take control of your finances now, look at your expenditure, plan your budget and by all means, seek advice or counselling if you need to," he claimed.

Meanwhile, those who are struggling to meet demands for payment from various creditors were recommended to consider taking out a debt consolidation loan. "This can help reduce the amount of money you are paying each month and make the process of repaying your debts simpler," Sainsbury's Bank suggested.

Findings also reveal that concerns over financial matters has affected the physical health of 3.27 million Britons over the past year. Some 4.1 million adults - nine per cent of the population - claimed that money problems had damaged their relationship with their partners.

Overall, consumers in the south-east of England and Scotland were reported to have the highest proportion of those afflicted by money fear, while the north-east had the lowest number of people concerned. As a result, psychologist Dr Jeremy Adams claimed that financial anxiety can "be an unfortunate side effect of modern living". He said: "It is important to take control of your perceived problems, like anxiety about money, by adopting positive steps such as monitoring your spending, or seeking professional advice."

Meanwhile, a study conducted by MoneyExpert has indicated that over a million repayments have been missed on personal loans so far during 2007. Since the start of the year there has been a shortfall of some 1,389,000 payments, with three per cent of borrowers said to have missed making a repayment over the last six months.

However, chief executive Sean Gardner warned: "Burying your head in the sand is not the way to deal with financial problems." "The concern has to be that people are missing repayments on unsecured Loans because they believe there's not as much at stake as missing a mortgage repayment," he added. Mr Gardner suggested that consumers' ability to meet personal loan costs could be further squeezed should interest rates rise within the coming months.
About the Author
Abbi Rouse writes for 1 stop finance shop where visitors can apply for UK debt consolidation loans. We also focus on cheap personal loans and bad credit loans for UK residents.
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