A middle-class couple would normally be seen as a success if they had their own large, detached home, two cars in the driveway, nice holidays, a golf course lifestyle and children lined up for private school. But when he handles middle class divorces, the family solicitor Andrew Newbury of Pannone finds that a growing number of such couples have borrowed their way to apparent prosperity.
Speaking of a typical case, the Manchester-based lawyer says: "Unbeknown to the wife, the lifestyle is built on credit cards. I've always seen a slight element of it but I'm seeing a lot more now. It's becoming worryingly common." And, instead of sharing out the matrimonial assets, the couple will split the debts. In many cases of traditional marriages, the husband will shoulder all the liabilities to enable the wife to buy a much smaller house for herself and the children. But the woman is often scared and shocked, unable to believe for months the truth of what has happened.
"The initial reaction is disbelief," says Newbury. "Then they think he must be hiding the money somewhere."
This is just one example of how the seemingly wealthy are suffering in this downturn. Few people will sympathise with them, and few think-tanks will study them. But suffer they will. And they will range in type from the flamboyant over-spenders to the lone mothers, the graduates who lose their good jobs and never get back on track, and the people who are derailed by ill health, divorce or some other problem and gradually sell off their bits of silver as they edge closer to poverty.
The Worthing-based independent financial adviser Garry Spencer of Wilbury Financial Management stands up for one group that few others would defend: solicitors. "A lot of them are struggling," he says. "They got as big a mortgage as they could get, and now they are fire-fighting. A lot are having pay cuts. They are cutting their pension, the life cover and cashing in the ISA [Individual Savings Account]. Some of their kids are being taken out of private school. Many are borrowing again, and they are missing payments on their credit cards. That affects their future credit card rating. Poverty is a spiral, and you get deeper and deeper into debt."
Many ordinary people will undoubtedly struggle this year, even if they do not lose their jobs. The employment adviser Richard Lynch, formerly an official at the union Unite, believes that the combination of 3.7 per cent inflation and pay freezes across a third of employers will ratchet up the pressure. "It's going to be very difficult for people of all levels to keep up." But those that do get laid off are likely to suffer more.
The University and College Union predicted 6,000 job losses among academics and college staff last year, but has just upped that figure to 15,000. The specialists in this sector – like the experts on Romantic poetry or peace studies – may find it harder than others to transfer their skills to a different environment.
In the very worse cases, people get caught in a rut which wrecks the rest of their life or vastly reduces their enjoyment of it. For instance, particular problems exist in these three groups: young blacks (which suffer 48 per cent unemployment rates, compared to 20 per cent for young whites, according to the Institute of Public Policy Research); single parents (of whom 57 per cent are unemployed, according to the Government); and older, single women (which "have a 24 per cent chance of living in poverty", according to the Fawcett Society). These groups are always vulnerable, but can suffer much more than others in a downturn.
Nevertheless, there are many steps that the struggling middle classes can take to protect themselves.
* Keep some emergency money. "You physically need it in case the car breaks down or the boiler has to be replaced," says Garry Spencer. Psychologically, people tend to feel better if they have £200 in the bank (much of the reason why the Government introduced Child Trust Funds).
* Talk to your partner about money, especially if you are dependent on them. People can overspend if left to their own devices or panic under pressure. Do not build up debts in joint names unless you would be prepared to repay them yourself. "Divorce courts don't have powers as regards third parties," says Andrew Newbury, meaning that you are still liable for debts in your name if your ex-partner agrees to take them on and then defaults.
* Accept that adapting to a more modest lifestyle can be much better than expected once you are through the shock barrier. "The process of adaptation is extremely psychologically difficult, particularly letting go of what we had," says the chartered accountant Richard Murphy of Tax Research UK. "It is five times harder to give something up than to acquire something new." He is calling for tax relief to be cut on advertising so that the temptation to overspend is reduced.
* Try to get advice on your finances before you get into difficulties. About 30 Citizens Advice Bureaux are running "MoneyPlan" advice schemes, using local financial advisers in a pro bono capacity. Clients of the scheme are mainly "asset-rich, cash poor" (75 per cent owning their own home but 58 per cent with a monthly income of under £1,000) and are trying to prevent themselves having financial problems, rather than to respond to emergencies. A list of participating bureaux is about to go up on www.citizensadvice.org.uk. A similar government-sponsored scheme, Moneymadeclear, is being rolled out by the Government (and Citizens Advice runs it currently in the North-east).
* Do not neglect your pension. You can end up poor and at the mercy of the state if you do. Commenting on people who stop contributions temporarily to save cash at 40, the pension analyst Laith Khalaf of the adviser Hargreaves Lansdown says: "Once you have started down that road, it's easy not to start up again." Long-term you should have a pension strategy in place as well as some savings.
* Get all the tax credits, benefits, grants and information help you can, such as working tax credit, disability living allowance and home insulation assistance. Many people are entirely unaware they could claim for these. See the website of the Low Incomes Tax Reform Group (www.litrg.org.uk) for some information, get a benefits check from Citizens Advice and/or try the Tax Credit Helpline (on 0845 300 3900).
* If you are on a pay freeze or cut, make sure you negotiate for a serious pay rise when your employer can afford it again. Some employers are on their uppers. But Richard Lynch says: "A lot are probably giving the recession as an excuse."
* Sacrifice quality of life as little as necessary if you do end up in tight circumstances. Being without the internet, for instance, will make you a second class citizen in many ways and you will lose its enormous entertainment value.
Case study: 'I did feel bitter about my situation'
Until five years ago, Harry used to go on holidays in the US and Africa. His career as a buyer had been a bit bumpy but he had mostly managed to keep his earning levels up. Harry (not his real name) has the equivalent of a university degree (an old-fashioned Higher National Certificate qualification) in business studies, a specialist diploma and considerable, successful experience.
But in 1996, when he was 47, some problems started to set in. Hit by the UK's manufacturing decline, the company he worked for laid him off as part of a round of compulsory redundancies. A year later the company collapsed. Harry was particularly exposed, however, as he also had a disability. "My hearing got very bad, and I was having trouble doing my job because of it," he says.
He signed on and then got a Christmas job working in a warehouse for a retailer. Was he bitter? "I did feel bitter that I'd been put on the shelf. All my experience and qualifications were of no use whatsoever."
Did he feel humiliated as a graduate packing boxes? "No. I was working with three guys with degrees, all doing temporary jobs over Christmas. Everyone was in the same boat."
His Christmas job ended up lasting 10 years, as he worked his way up through the organisation and into an office job. Then five years ago, when he was 56, his back was causing him problems, he could not carry on with the physical demands of that job, had to leave, signed on again, did internet work applications and got new employment. He now drives cars for delivery, an ideal occupation for a motor enthusiast. "It's a lovely job," he says. But it pays a minimal rate and certainly not enough to fund holidays.
Although Harry, now 61, will start drawing his pensions, state and private, in four years' time, he will have less income than he hoped at that stage as well. Of six private pensions he accumulated over the years, one was rifled by an employer, leaving 45 per cent of what was owed, and another was so poorly managed that it cannot pay its full liabilities.
Despite all of this, however, Harry is known as a cheerful person and his realism is touched with optimism. He kept well away from credit card and other kinds of debt and has paid off his mortgage. He remembers when he lost the "very good money" he once earned and how he used to rail against his situation. But he feels he has enough to live on now: "I am financially comfortable." And he decided to give up feeling angry a long time ago: "You want to feel bitter but there's no point."