Many consumers could find themselves in debt or suffering from financial problems as they do not spend enough time thinking about money matters.

This point was made by personal finance expert John Lawson and psychologist and relationships specialist Dr Janet Reibstein, who both noted people think far more about their loved ones than they do about their personal economic situation.

Mr Lawson said: "Our research shows that [consumers] spend just about half an hour a day thinking about money matters and yet two hours twenty minutes thinking about emotional commitments. Family, friends and loved ones are an important part of people's lives."

While it is not a bad thing to spend time dwelling on personal matters, people should devote more time and energy to finance, he added.

Dr Reibstein backed this up by noting people make a "distinction" between the two subjects.

She added: "You make decisions about how you want to live and finances either support them or don't."

Such a situation could mean many people are too focused on their family, friends and close personal relationships to mange their money in the way they should, something that could lead some into running up arrears and needing debt management help.

However, this week has provided evidence that some consumers have been more money conscious when approaching close personal matters, with a Santander survey showing the average person is spending £879 on gifts, treats and dates with their nearest and dearest this year, compared to £1,103 last year.

This change has included 22 per cent of people looking for cheaper ways to date, while spending 13 per cent less on anniversaries and Christmas and 11 per cent less on birthdays.

Overall, women have cut back more (23 per cent) than men (22 per cent), the survey showed.

Posted by Paul Thacker
 

More people may seek individual voluntary arrangements (IVAs) as a result of being unable to pay what they owe after losing their jobs in a new unemployment surge.

The latest official job figures were published by the Office for National Statistics (ONS) today (September 14th) and show a worsening picture across a range of indicators.

Over 80,000 more people became unemployed in the three months to July, pushing the total to 2.51 million, the highest since January this year, while the share of the workforce in employment is 70.5 per cent, the lowest since November 2010.

And youth unemployment has reached 973,000, or 20.8 per cent of those aged 16 to 24 – the highest percentage ever recorded.

The jobseekers allowance claimant count is up as well, an indication that those out of work increasingly have to rely on benefits. At 1.58 million, this tally is at its highest since the 1.61 million of January 2001 – just after Britain came out of recession.

Such indicators may suggest the need for debt help could be great, as some of those signing on could have lost their jobs while paying off loans, credit cards and overdrafts – costs that suddenly pose a much bigger challenge.

Many of these people could be in the public sector, as a separate ONS publication revealed the second quarter saw 111,000 jobs shed as government cuts kicked in.

As well as 57,000 local government and 47,000 central government workers going, another 7,000 working in public corporations were handed redundancy notices.

By Joe White
 

The average person in debt and suffering fuel poverty owes just over £15,000, a new survey has indicated, a figure large enough for individual voluntary arrangements (IVAs) to be considered.

Research by the Consumer Credit Counselling Service (CCCS) indicated that a third of people in debt approaching it in the first half of this year were also in fuel poverty – defined as where over ten per cent of a household's income is required to pay energy bills.

It said that for this group, the typical monthly fuel bill was £136 out of an income of £847, worsening a debt burden that widens by £302 a month on average.

As a result, the mean unsecured debt level for those in this category has soared to £15,759, the organisation revealed.

Taking an IVA may be a wise option as it can reduce monthly payments, lead to interest being frozen and ensure that after five years or less all remaining debt will be cancelled.

One reason this may be considered by those in fuel poverty is that the situation could get worse, since the statistics refer to the period before the current round of fuel price hikes.

Commenting on this, CCCS director of external affairs Delroy Corinaldi remarked: "The finances of people in fuel poverty are already significantly overstretched – and we are extremely concerned that the current round of energy price rises could plunge them even further into debt."

E.ON and Scottish and Southern Electricity impose their increases this week and speaking earlier this month about their move, director of consumer policy at uSwitch.com Ann Robinson said: "Families are coming under financial pressure from every direction and these price hikes as we head into winter are going to push some even closer to the edge."

Posted by Paul Thacker