Clearing Debts A Top Priority For Coping Classes

Thu, 07 Apr 2011

Britain’s middle-income earners are focusing on paying off their debts amidst fears they will be unable to provide for themselves and their families for longer than six months should they become unemployed .

A new report by pensions firm Friends Life claims that the economic recession has caused radical changes in people’s attitude towards debt .

It found that over half of middle income earners who have been hit by the recession and feel disproportionately affected by public sector spending cuts – referred to as the ‘Coping Classes’ - are now concentrating on clearing their debts to "stave off the threat of sinking financially".

The study also revealed that most people in this group are committed to not taking on more debt over the next six months, while nearly three-quarters intend to repay most of their borrowings within the next ten years.

Commenting on the findings, David Hynam, Executive Director, Operations at Friends Life, said: "Five years ago the Coping Classes were comfortably off, but the recession and the effects of public spending cuts seemingly tilted against them has changed their status."

"We’re now seeing them take clear, decisive and urgent steps to address this, in the knowledge that state support and assistance in many areas is unlikely to return."

"Most striking is the new attitude towards debt . We’re witnessing a slow march down the debt mountain, which will have huge implications for financial planning and for the financial services industry."
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