Long-term debt 'a reality for many'
Published On 18 August 2007
People in the UK will take nearly eight years to pay off their current debt, new research suggests.Data gathered by Fool.co.uk found that people in the UK typically have non-mortgage debts which amount to £11,000 and this will usually take seven years and seven months to pay off.
However, the financial website found that 66 per cent of people mistakenly believe that their debt will take far less time to clear. On average, people think they will be debt free in around three years.
Despite this optimism, 19 per cent of people with debts of over £20,000 cannot currently afford to make any repayments.
In addition, 31 per cent of consumers say that they spend over a fifth of their earnings every month paying off debt.
David Kuo, head of personal finance at the site, said: "It is worrying to learn that two out of three people have taken on debts without fully understanding what is involved or how long it will take to repay the loan.
"For many, borrowing money is as easy as walking through a doorway. But it's a good idea to ensure that you have a way out before the door slams shut."
Recent figures from the Insolvency Service show that over 10,000 people used an IVA in the second quarter of the year to manage their debt.
