One of the largest surveys of its kind has revealed that two million UK households could be plunged into serious financial difficulty if the economy took a turn for the worse, and that half a million households are already struggling despite low interest rates and high employment.

The survey, conducted on behalf of the Financial Services Authority, suggests that 2m households are able to make ends meet by paying bills and servicing debts, but failing to put any savings aside to help them cope with a drop in income or a rise in costs such as interest rates pushing up mortgage repayments.

As well as debt levels, the FSA blames the situation on a lack of financial knowledge, particularly among those under the age of 40, and has put aside £10m for a campaign of education aimed at improving peoples’ money management skills.

The FSA says that it plans to repeat the survey every four years to see what effect its efforts are having, although a spokesperson said they expect a steady growth in financial management skills rather than any immediate dramatic effect.

This entry was posted on Tuesday, March 28th, 2006 at 11:38 am and is filed under Debt News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.