Consumers should make allowances for a change in their personal circumstances before taking out a loan or entering into a credit arrangement, a not-for-profit has advised.
According to the Debt Advice Bureau, consumers need to plan their finances properly to ensure that they don’t get caught out by unforeseen changes.
Spokesman Stephen Rose said problems can occur when people rely on potentially changeable arrangements.
“A lot of people assume, for example, that the overtime they’re getting is guaranteed,” he said.
According to government figures, there were more than 30,000 insolvencies in the first quarter of this year – a 23.9 per cent increase on figures for the same period last year.
However, Mr Rose opined that many of these would not have been triggered by the recent interest rate rises, which were “not necessarily a great change, relatively speaking”.
He said that many problems were caused by a simple lack of foresight and advised: “If you want to guarantee nothing is going to go wrong – prepare for it.”
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