New research commissioned by the Financial Conduct Authority revealed some people who are struggling financially are not seeking support because they are embarrassed.
42% of borrowers who were struggling and ignored their lenders’ attempt to contact them had done so because they felt ashamed.
Two out of five people (40%) who were struggling financially incorrectly thought simply talking to a debt adviser would have a negative impact on their credit file.
Commenting, Myron Jobson, Senior Personal Finance Analyst, interactive investor, says: “The research shows that there still seems to be so much shame around admitting an inability to pay debt. The harsh reality is many households are struggling to keep pace with escalating living costs. Livelihoods are being stretched to breaking point and even comparatively minor setbacks such as a broken fridge or a higher-than-expected energy bill could trigger a financial crisis for some households.
“The fact that more than 4 in 10 of borrowers who were struggling surveyed said they had ignored their lenders’ attempt to contact them because they felt shame is worrying. Too often people feel that it is a personal failing if they are struggling to keep financially afloat and feel too ashamed to open up and seek help. The result is people often carry this burden alone, which can cause their financial problems to escalate and leave them feeling overwhelmed or unable to see a way out.
“Unlike the ‘squeezed middle’ group, which is more likely to have assets to act as a buffer against financial disaster, low-income households are brutally exposed to the cost-of-living crunch. Living under a cloud of money woes can leave anyone feeling the strain, and can make it harder to think about your finances and find solutions to money problems you may find yourself in.
“Those struggling to keep on top of their finances needn’t suffer in silence – there is support out there. If you’re behind on your bills, contact your creditors to ask for support. It is worth consulting a debt advice charity such as StepChange or Turn2Us and they will go through all of your options.”