People with financial problems should seek expert help rather than bury their heads in the sand, advises R3 insolvency trade body for Yorkshire at the start of Talk Money Week. (November 9 to 13)
It says that COVID-19’s financial impact could be a potential conversation starter for individuals and families during the annual awareness week.
The Government’s Money and Pensions Service (MaPS) holds the campaign – this year from November 9 to 13 – to encourage people to discuss personal finances.
Eleanor Temple, chair of R3 in Yorkshire, said: “Members of R3 all too often see the consequences of people burying their head in the sand when it comes to their finances.
“The key to dealing with personal finance issues is to address them at an early stage when more options are available rather than let them spiral out of control.
“Talking about money is understandably quite difficult for many people but the COVID-19 pandemic does make it more important than ever to do so.
“The financial impact of the pandemic can be a conversation starter, whether for parents talking to children about money or for someone struggling to open up about their money problems.
“With so many people and businesses relying on Government support, a three-year high in unemployment and rising redundancies, there should be absolutely no stigma in talking about money and getting help.”
Despite the COVID-19 crisis affecting finances, nine in 10 UK adults – 47 million people – don’t find it any easier to talk about money or don’t even discuss it at all, according to MaPs.
It says that research shows that people who talk about money:
- make better and less risky financial decisions
- have stronger personal relationships
- help their children form good money habits for life
- feel less stressed or anxious and more in control
Eleanor, who is a barrister at Kings Chambers in Leeds, urged people to seek expert advice if facing financial difficulties. She said: “Whilst speaking to friends and family can be an important first step, it is also important to gain impartial advice from a regulated and qualified professional.
“They will have the experience and knowledge necessary to help, especially if discussions take place at an early stage to give the best chance of regaining financial stability.”
R3 supports the aims of Talk Money Week and has also campaigned for such measures as the ‘breathing space’ scheme to give indebted individuals more time to seek advice free of pressure from creditor action. The scheme is due to come into effect as of next May.
According to R3, common personal insolvency triggers include business failure, redundancy, relationship breakdowns, credit card debt, and unsecured bank loans or overdrafts.
Latest government figures from The Insolvency Service showed that personal insolvencies stood at 19,783 in the third quarter (Q3) of 2020 – down on the previous quarter and year, amid Government COVID-19 support.
This was mainly driven by a sharp drop in Individual Voluntary Arrangements (IVAs) and a seven per cent fall in Debt Relief Orders, although bankruptcies rose by ten per cent.
According to latest figures from the The Money Charity for August 2020, the average debt per household, including mortgages, is £60,526. Per adult it works out at £31,972.