Debt Levels Reduce But Financial Worries Remain
Published: 17 July 2012 By Peter Thompson Leave a Comment
Whilst 35% of Brits have reduced their debt levels in the last year, some 27% have had to increase their total debt and over a third are worried about being in the red over their finances.
New research from MoneySupermarket.com reveals the average amount of personal debt, excluding mortgages, is £6,926, a reduction of £1,500 since last year.
Those who are in debt but not already worried about their borrowing levels would need their debt to increase to £13,761 before they become concerned. For almost half, this extra debt would cause stress and for over a quarter it would cause sleepless night.
Some of those in debt feel it will always be part of their life and some will be paying over the odds on interest payments as they can only afford to make the very minimum repayments to clear it.
Tim Moss, head of loans and debt at MoneySupermarket.com, said: “It’s encouraging to see consumers showing prudence and looking to pay down their debt.
“However, with the economic outlook continuing to remain uncertain, many Brits are feeling very concerned about their current financial situation. Balancing the household budget is hard enough without being saddled with the additional pressure of debt repayments.
“However, there is no need to suffer in silence and there are many options to make steps to reduce personal debt, before it escalates out of control.
“Reviewing all of your outgoings to see where you can make savings can really help free up cash which can be used to pay off your debts.
“In fact, families can save £1,000 on all of their household bills by switching providers – including energy bills, home and car insurance. If you have a credit card then switching to a zero per cent interest product may help in the long term – it allows you to pay off your existing balance over time without accruing additional interest, but make sure you repay on time each month otherwise you will lose the promotional deal.”
MoneyHighStreet comments: “It is staggering that people are ‘comfortable’ to get themselves into so much debt before considering they are facing a really financial challenge.
“It is fair to say that many people are really struggling now and regularly find that their outgoings exceed their income. They are facing debt problems which will not go away.
“To cope, as well as dipping into savings, some are borrowing money and even using credit cards to fund day to day living costs. But if you are needing to borrow money and yet cannot repay the debt, if your outgoings consistently exceed you income, it really may be time to seek professional advice.
“Whilst only few seek debt advice. This really isn’t sensible.
“You can contact organisations such as the Citizen’s Advice Bureau, the National Debtline or the Consumer Credit Counselling Service to get some free, independent debt advice from the experts.
“Make sure you get the best prices on the products you do buy. Many consumers are now shopping online and using such as voucher sites to get the best deals.
“If you can, plan expensive activities, such as your summer holiday, well in advance too. That way, you hopefully have time to save money to pay for it and also take advantage of any special offers available.”