Are young workers most in need of a trust deed?
23rd June 2011
Most people have been feeling ‘squeezed’ financially to some degree in recent times. Evidence is emerging however that certain demographic groups within Scotland are being much harder hit than others.
One such group appears to be younger workers. Traditionally this group (defined as those below 30 years of age) have been starting out on their careers and have not reached the point at which their earnings peak. This reality appears to have been magnified in the current economic climate. In fact, the real earnings of younger workers have fallen considerably more than has been the case for all other age groups making them much more susceptible to the need to enter a personal insolvency such as a protected trust deed.
A survey by the Institute for Employment Studies reveals the severity of the impact on young workers. Their real earnings (as measured by the amount they are able to buy with their earnings) have fallen on average by nearly £900 a year since 2008. Young workers are being paid less in real terms per hour and in many cases are permitted to work fewer hours.
Many workers under 30 will have accrued significant debts already. Some of the debt may be a residue from studying, some debt may have been acquired for lifestyle purchases and many people will have used credit for expensive periods such as starting a family or setting up a home. All are potentially ominous signs creating risks that might later point towards a trust deed.
Another issue facing younger workers in Scotland is exposure to periods of unemployment. Time out of work is often accompanied by a build-up of debt to fill the gap of lost income. Statistics show workers under the age of 25 are particularly exposed to this risk.
Where faced with debt repayment affordability issues, younger workers are best advised to seek help from a professionally qualified debt adviser or a trust deed company as soon as possible. They will typically have a lower level of debt if advice is sought earlier and this frequently results in less severe resolutions.
If there has been a serious build-up of debt which cannot be fully repaid within a realistic timeframe then the more formal debt solutions, including a trust deed, may become necessary. Because the timeframe of a trust deed is fixed, a younger worker may be able to more easily plan for their financial and personal future knowing that they will be free of their debt at a fixed point in time.
With few signs of economic progress or an improvement in workplace terms and conditions it appears, for the being, that financial pressure on younger workers is here to stay.
For further trust deed information, advice and support please make use of the free resources here at Trust-Deed.co.uk.
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