Pay rises can lead to debt, workers advised

Just under 20 per cent of Britons have got into debt by spending on credit in anticipation of receiving a pay rise or work-related bonus, according to a new report.

That equates to around 3.4 million British adults, who have accumulated a debt of £2.49 billion between them, a Prudential study found.

Of those that indulged in such spending – dubbed “money illusionists” by Prudential – almost half had accumulated a personal debt of £1,414 or above.

Alarmingly, one in ten spent pay rises or bonuses in advance, then received less from their employer than they were anticipating.

Prudential spokesman Angus Maciver said pay rises and bonuses often “appear to be putting people further into debt”.

“A pay rise or a bonus ought to be the trigger to get debt under control but too many of us simply see it as an excuse to spend more,” he added.

In relate news, Nationwide building society has advised consumers to start saving after a study revealed that one in five households are putting nothing aside.

© Adfero Ltd

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