According to statistics from the National Institute of Economic and Social Research (NIESR), the current recession the UK is experiencing could be the worst since the early 1930s.
In its economic review, the leading research body revealed that in 2009 the UK’s gross domestic product (GDP) could contract by 4.3%.
A NIESR spokesperson said: “There is a real possibility that GDP will fall more this year than in 1931“.
The economic body also forecasts that unemployment will continue to rise to a peak of around 3.1m people – the equivalent of 9.6% of the labour force in 2011.
This could spell disaster for those who are part of the recession’s collateral damage and have been made redundant, especially if they are already struggling with their finances.
With many companies cutting jobs, rather than taking on more staff, competition for roles has increased making it tougher to restart earning following the loss of a job.
Debt help organisations can recommend a number of solutions to help people through this difficult period. Solutions like debt management plans have received increase interest from the press, as more people are now in need of a way to get out of debt.
Debt management enables people who are struggling with their current unsecured credit commitments to regain control of their finances, whilst still making a contribution towards their debt.
These work by gathering all unsecured balances (personal loans, overdrafts, store cards and credit card debts) into a single monthly payment. Repayments are then negotiated to be restructured over a longer period of time – thus making finances simpler and more manageable.
Other debt solutions include an Individual Voluntary Arrangement (IVA), Trust Deed amongst others. An IVA works in a similar way to a debt management plan but is repaid over a fixed period of time (usually five years). Once the IVA is complete, all remaining unsecured debts are written off.
Specialist debt help organisations can offer impartial debt advice and IVA advice to anyone who is feeling under financial strain. Reputable organisations, such as The Debt People, Hamilton Locke and Chiltern, all offer free debt advice. They can also recommend a number of suitable debt help programmes to alleviate debt problems.
Fortunately, the NIESR don’t think we’ll quite hit the same levels as the recession of 1921 – when the economy shrank by 10%.
For further information on all debt solutions, or for immediate debt and IVA advice, please call the number at the top of this page.