By Daniel Hunter
One in five people have experienced an unexpected large drop in their income over the past three years.
Research from the Money Advice Service has found that of those who have seen their income plummet, two in five people had lost their job due to redundancy or ill health. Just under one in five saw a drop in their salary, while one in seven were earning less as a result of changes to their working hours.
Other reasons why consumers experienced a drop in income include separating from their partner, having a baby and having to repay debts.
Of those who have seen their income fall, more than two thirds have responded by cutting back on their spending, while three in ten have resorted to dipping into their savings. More than a quarter have sold personal belongings to raise cash, while one in seven have borrowed money from family or friends.
"This report reveals just how difficult it is at the moment for so many of us, but also highlights ways we are adapting to manage financially,” Caroline Rookes, chief executive of the Money Advice Service said.
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