Pay Variance Affects Need for a Protected Trust Deed

9th June 2011

Different professions have experienced vastly different changes in their “real-income” according to a TUC report. The report covers the past thirty years and identifies the fact that lower and middle earners have not benefitted from growth in the UK economy in the way that some professionals have.

The choice of a thirty year time period doesn’t just coincide with a period of great economic growth. It also coincides with a period of enormous growth in property values, a factor which has encouraged growing numbers of people to take on substantial amounts of mortgage debt. Unsecured debt has also become increasingly available during this period. Far fewer people used credit cards on a regular basis in 1981 than would currently be the case. As general levels of debt in Scotland have grown, so has the need for a protected trust deed and other types of solution to unmanageable levels of debt.

Medical practitioners, barristers and lawyers, teachers and senior accountancy staff have all enjoyed above average increases in real-income over the past thirty years.

Growing income in itself does not however protect anyone from the perils of a high level of debt. Protected trust deed advisers will have spoken with many individuals in such professions during the course of their careers, as substantial income can enable the borrowing of even larger amounts via personal loans and credit cards.

It’s also important to note that certain professionals may not be able to enter into a protected trust deed and maintain their professional status. This is because the regulatory bodies which supervise some professions (including for example lawyers and accountants) may not be comfortable with their members initiating or being subject to insolvency proceedings.

Persons experiencing below average growth in real-income include mechanical engineers, joiners, bus drivers, bakers and fork lift truck drivers. Anyone working within the field of protected trust deed help and advice will recognise that they have assisted many people in the past working in these and similar fields. Their income has not grown substantially compared to the situation thirty years ago but they have been subject to higher housing costs and the same debt temptations available to all workers in the UK.

The report identifies neither a growth of jobs offering a good income nor any realistic level of job stability and security. Weak levels of income clearly increase the temptation to use debt, especially when the vast majority of income is consumed by the purchase of essentials. Lower levels of income may also push people towards expensive sources of credit which can magnify future difficulties. Weak employment stability increases debt vulnerability substantially. Protected trust deed advisers will have spoken with many clients who were managing well financially until a period without work led to a temporary reliance on credit.

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