High levels of personal debt are linked to "stagnant" wages and consumers will owe increasingly large amounts unless or until this changes, according to general secretary of the Trades Union Congress (TUC) Brendan Barber.

A speech Mr Barber will deliver at the University of Liverpool today (October 26th) on his alternative vision of the economy has identified this as a key issue, with the TUC boss stating the share of gross domestic product going into worker pay packets has declined from 65 per cent in the late 1970s to 53 per cent now.

He said: "As wages have stagnated, debt has soared. As incomes are squeezed further, the Office for Budget Responsibility expects household debt in this country to reach over £2 trillion by 2015 – an albatross around the neck of our economic future. "

Mr Barber argued that unless this changes, economic growth will be held back.

Those struggling with a growing personal debt problem may help themselves by taking on a debt management plan, to spread the payments over a longer period.

Those who are beyond being able to pay may consider insolvency – with bankruptcy not being the only option as they might be able to take out an IVA if they owe £15,000 or more.

Such an arrangement would involve interest being frozen, monthly repayments trimmed and all remaining debt written off after five years.

The wage problem Mr Barber is referring to has been prominent this year, with the most recent Office for National Statistics data showing Consumer Prices Index inflation to be 5.2 per cent, while pay is running at 2.8 per cent with bonuses and 1.8 per cent without.

By James Francis
 

Drivers may end up with a greater debt management need than others of similar incomes because of higher car insurance premiums linked to their employment.

A study by Confused.com has revealed a wide disparity in the cost of annual insurance, with the average mobile disco owner having to fork out £6,809 and airline pilots just £321 a year.

It may be that the pilots gain from a perception that they are very safe in charge of a machine, having the evident skills required to fly and land passenger aircraft safely.

Others at the top end of the scale for premiums include footballers, many of whom are of course very highly paid and therefore have extremely expensive cars.

At the same time, referees also come into this bracket despite not being paid so highly – although they are, of course, people whose judgement is regularly questioned.

Students are also among the costliest to insure, with most of them being young and fairly newly-qualified.

However, there may be less obvious reasons for some people being charged high or low fees.

Those considered safer drivers and cheap to insure include guesthouse owners, toy makers, nurses and China restorers.

All this could mean that while some people are fairly cheaply insured, the cost for others is very high – even if they are safe drivers or do not have large incomes.

Consumers have been struggling recently with large increases in the cost of insurance, something the AA has described as the greatest surge in premiums ever.

However, it declared this process has now come to an end, with the three months to September seeing a 0.3 per cent drop (£2) in average annual cover.

By Joe White
 

Many people in Lancashire could find individual voluntary arrangements (IVAs) are necessary to help get out of a deep debt problem due to losing their jobs and being unable to pay what they owe.

The latest announcement of redundancies has come from services firm Enterprise, which is to axe another 42 posts after 10 were lost earlier this year, reports the Lancashire Evening Post.

It will make the move from among its 540-strong workforce based at Leyland.

Group shared services and project management office director Martin Rimmer said: "We have carefully reviewed the design of our organisation and overhead costs and, as a consequence, we unfortunately need to make a small number of roles redundant across the business in order to continue to be competitive in our chosen markets."

For those who do lose their jobs, debt can soon mount as bills go unpaid and those who owe £15,000 or more can seek an IVA, which can reduce the amount to be paid, freeze interest and put a time limit on the repayments of five years or less.

Those seeking this should note it requires the agreement of at least three quarters of creditors and is a form of insolvency, meaning it will have future credit file implications.

Enterprise employees are not the only workers in Lancashire fearing for their jobs, with defence and aerospace manufacturer BAE Systems recently announcing 843 posts are to go at its Wharton and Preston sites.

Other sites owned by the firm across the country will also be hit by redundancies as the firm plans to shed 3,000 staff.

Posted by Paul Thacker