Higher-end earners are being forced to seek debt management advice as they struggle to maintain their extravagant lifestyles, a Solihull company has said.
Figures released by debt advice and support service Moneyfreedom reveal that 20 per cent of new clients fall into the 40 per cent tax bracket.
The service, operated by Solihull bank Moneyway, has reported a surge in clients turning to them for advice and support in combating their personal debts.
Moneyway sales and marketing director Owen Woodley said: “There is a common perception of a person in debt being someone who doesn’t earn enough money to buy things, and goes overdrawn, or takes out a loan, or maxes out their credit card, regardless of the consequences.
“We don’t associate it with people earning more than £30,000 a year, who look polished, drive lovely cars, live in well-presented homes with high-end appliances and holiday twice a year. But people would be amazed just how many of those people are hiding behind something of a façade, and how different the reality is.
“The past few months have seen many people calling our Moneyfreedom advice service, all in the same boat: they got a taste for a comfortable life and found themselves offered credit freely, and the temptation proved irresistible and they made life even more enjoyable, with easy-to-meet repayments,” he added.
Mr Woodley said with an increase in the cost of living due to higher fuel and energy prices many people were now facing problems keeping pace with their lifestyles.
“Suddenly, driving around in a BMW isn’t as affordable as it was, the mortgage repayments that were just about manageable are now a real concern, and the leather sofa in front of the vast flat-screen TV isn’t as comfortable as it used to be because people are a little anxious that they haven’t actually paid for it yet,” he said.
He added that while it was encouraging that more people were taking steps in the right direction to free themselves from debt, it was regrettable that it had taken a national credit crisis to prompt people to seek help.
“Too many people are telling themselves that things will get better and they will deal with their situation then, but economics experts have predicted that it will get worse before it gets better,” he said.
“More than 20 per cent of new Moneyfreedom clients in the past six months are in that high tax-band bracket – and have become the victim of their own success as they find out how stretching themselves to the limit for the posh house and the flash car can be their undoing when the country gets gripped in the current economic climate,” he added.