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Could high inflation and low wages lead to insolvency? |
New figures reveal high levels of inflation are putting many Brits under financial pressure, which could lead to some having to declare insolvency.
The latest Asda Home Tracker shows that consumer price inflation stood at 4.5 per cent in May, more than double the growth in current earnings.
Furthermore, earnings growth fell to two per cent in the three months to April 2011, compared with the period between 2001 and 2008 when it increased.
As a result, many households have less disposable income and are being forced to rein in their spending, with the cost of transportation being particularly high.
Andy Clarke, president and chief executive officer of Asda, said: "The combined effect is creating a perfect storm for customers trying to make ends meet.
"The true cost of living is now beginning to take its toll."
These high inflation levels could also mean a growing number of people are starting to rely on credit cards.
Paul Crayston, media officer for the Money Advice Trust, recently said more and more Brits are dependent on loans and overdrafts, with many finding it difficult to meet utilities payments.
The team at Kester Cunningham John can offer professional advice to anyone facing the prospect of insolvency.
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