The need for insolvency advice could continue for many people until at least 2016, as the combination of high levels of debt during the time of prosperity, and real-terms drops in wages during the age of austerity, puts household finances under unbearable pressure.
According to the Trades Union Congress, one of the major imbalances in the prosperous years leading up to the recession was the reliance on high levels of consumer credit and debt by low to middle-income earners.
This was already caused by the fact that their wages, in real terms, were generally not rising any faster than the pace of price inflation, leaving them to rely on funding from other sources.
Rather than improving, however, the recession has introduced even higher inflation and even lower rates of wage rises for those who have managed to remain in employment.
An over-focus on financial services in the City of London is cited as one related imbalance, while those living in the north of the country may particularly have faced the need for insolvency advice in recent months.
“Everyone agrees that our economy needs to be better spread across industries and throughout the country,” says TUC general secretary Brendan Barber.
“But so far, progress towards achieving this rebalancing has been woefully slow – and, in some cases, is going in the wrong direction.”
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