Money Debt and Credit

Money Debt and Credit

May 27, 2011 03:00 ET

UK Richest Receive 1,600% More Income Than Poorest

LONDON, UNITED KINGDOM--(Marketwire - May 27, 2011) - An annual report published by the Office for National Statistics (ONS) released this week (May 19th) has revealed that the richest fifth of UK households received income that was 16 times greater than the poorest fifth last year – signifying a sustained wealth gap between the wealthiest and poorest in our society.

As a result, UK debt solutions firm Money Debt and Credit is warning that some lower income households have found their budgets stretched to the limit, with many facing mounting debts after a year which was also marked by a period of sustained benefit cuts.

According to the ONS figures, even after taxes and benefits, the gap between the richest and poorest fifth of households stood at four-to-one. Although those on lower incomes pay less tax than those in higher income brackets, they tend to pay more in indirect taxes such as Value Added Tax (VAT) because they spend a greater proportion of their wages. For those households who have seen a rise in the cost of living which has not been matched by an increase in income, the result has been an accumulation of debts which are now a continual drain on their income.

One solution for individuals who are finding it difficult to service their debt is to consider making full & final offers to their creditors.

A full and final settlement is a process whereby some of a debt is written off in exchange for a partial payment via lump sum – usually at least 30 per cent of the total debt. The settlement can be arranged as an individual formal agreement between the individual and their creditors or as part of an IVA (Individual Voluntary Arrangement).

Creditors who agree to this method of settlement will receive their money much sooner and as a result will benefit from a substantial reduction in admin fees they may otherwise incur for the duration of the debt.

Mark Burton, Sales & Service Director for Money Debt and Credit, commented: "If you've been hit by rising prices and have no increase in income you may want to explore what financial help is available to you. While full and final solutions aren't suitable for all, they can offer some the opportunity to start afresh."

Notes for Editors

Money Debt and Credit is a leading provider of financial solutions offering a one-stop service to consumers on a range of products including Debt Management Plans, IVA's, Trust Deeds, Full and Final Settlements and Secured Loans.

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