Recent research by online comparison website uSwitch.com suggests that 25% of UK residents feel that they will not be able to pay off their unsecured personal debts within the next three years. This equates to 7,000,000 people in the UK who feel they will not be free of debt during this period, and this does not even include mortgage debt.
Personal debt in the UK has been made even more difficult to deal with in recent years due to the price of household bills rising year-on-year; wages remaining stagnant, the cost of renting a home being a major drain on a person’s income, and the ready availability of personal loans and credit cards.
Even more disturbingly, 7% of recipients claims that they felt they would never be able to pay off their personal debts. Despite recent positive signs in the UK economy, people on the whole do not feel any better off and almost 40% said that their debt has actually increased over the course of the last 12 months.
To put a figure on it, the average UK citizen currently owes £2423 in personal debt. This figure actually rises to £3385 for those in the age group 25 to 34, and for people aged between 35 and 44, the figure is not much lower at £3140.
Higher earners tended to carry a higher amount of debt on average, with the average personal debt being £577 more than the average. This is based on UK residents who earn between £40,000 and £70,000; the average level of debt in this group being £3000. Interestingly, although most people worry about their personal debt to some extent or another, recipients to this recent survey who earned over £40,000 said that they did not begin to worry until their personal debt reached around £5000, whereas those earning under £40,000 said that they began to worry at £4000 of personal debt.
How people deal with personal debt
In order to pay their most important debts and outstanding bills, 22% of borrowers said that they were actively trying to reduce the amount they spend on such things as petrol and food. Luxury expenses such as holidays have been put on hold for 39% of respondents to the survey until they feel their personal debt is under control.
Interestingly, the first stop for many people who need financial help is with friends and family, with 37% saying this is where they go to first. 23% said that they try to deal with personal debt by using an overdraft, while 26% said they used other credit cards to help them cope. Of course, using additional borrowing to manage borrowing is clearly a bad idea.
What you can do
As with all situations concerning personal debt, the best thing you can do is act as quickly as possible when you believe your debt is getting out of control. If you believe you are in this situation, contact us here today at Dissolve Debt to discuss how our expert debt advisers can help you.