Personal debt spiralling

A REPORT from the Portuguese consumer rights organisation DECO Proteste has revealed that people in Portugal are saving less and spending more on loans compared to people living in other EU countries.

The report concluded that 87 per cent of the Portuguese believe that it is important to save for unforeseen occasions such as illness and accidents, however only 40 per cent manage to save with some difficulty.

More than 30 per cent of the Portuguese do not put money aside regularly and one person in eight has no money left at the end of the month.

The report also found that for more than 40 per cent of the population, one third of their monthly allowance does not cover their loans, while 50 per cent have at least one high interest personal loan and 10 per cent of those uses these to pay off existing loans.

It was also found that consumers with an existing loan are less likely to negotiate with banks for better conditions on subsequent loans, while 90 per cent of those asked have stayed with the same bank since day one.

According to DECO, consumers must learn to compare and negotiate loan and savings packages as well as organise their budgets so as not to fall into debt.

Between January and October 2007, DECO Proteste received double the amount of requests for help with debt problems compared to the previous year.

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