People at financial risk because of 'unrealistic expectations'
Published On 16 June 2007
One in three people from the UK could be risking debt problems in the future because they base their financial decisions on expectations about their monetary situation in the future.NS&I has dubbed 33 per cent of people in the UK ' financial fantasists' because they are gambling with their security by expecting to earn higher salaries in the future.
On the expectation of higher future salaries, financial windfalls or inheritance, these people are borrowing more money than they can currently afford - putting them in the situation where they could find themselves in debt if these expectations do not turn out to be accurate.
Nearly a quarter (24 per cent) said that they are not worried about their current financial situation because they expect to earn more in the future. Similarly, over half (55 per cent) had no long-term financial plan.
"It's a real concern that such a high percentage of people haven't made a financial plan for their future, and even more worrying that a significant number are basing their financial security on their future earnings potential," warned Dax Harkins, a senior savings strategist at NS&I.
"There's never any guarantee that people will earn more as they get older so it's really important that people start their financial planning and start saving as early as possible."
A recent report from Fool.co.uk suggested that UK homeowners could be overstretched financially and that further interest rate increases could cause serious debt problems.
