Mass retail job losses will leave many unable to pay their debts.
As the British Retail Consortium predicted that the rise in VAT to 20 percent will lead to a loss of retail jobs, a leading debt charity warned of widespread debt problems among those working in the retail sector.
The Consumer Credit Counselling Service (CCCS) said that mass job losses in the retail sector would leave many incapable of paying their debts, possibly leading to an explosion of personal insolvency in the retail profession.
The charity claimed those on low incomes, the category many working in retail reportedly fall into, are the most likely to struggle.
Households with net incomes of less than £20,000 make up the bulk of those seeking help from CCCS, with many finding themselves trapped in a budget deficit, spending, on average, over £100 more than they earn each month.
Delroy Corinaldi, external affairs director at CCCS said: “Mass job losses in any sector are worrying, but particularly so in a sector where the average wage is quite low.
“Those on low incomes are likely to be already struggling to make ends meet and maintain their debt commitments so any reduction in income could push them into insolvency.
“I would urge anyone working in the retail sector who is worried about their debts to seek help now as the sooner they get help the more can be done to deal with their situation.”