New statistics have recently been announced which paint a worrying picture regarding the problem of personal debt in the UK, and how people see their finances on an everyday basis. The first survey was run by the consumer watchdog group Which? as part of their Consumer Insight Tracker. Many of the figures show that more households are now feeling under financial pressure than this time last year, with a third of families saying they now feel the pressure, up from a fifth 12 months ago.
Using their survey to extrapolate nationwide figures, 9 million households now say that they are struggling financially because of escalating fuel and food costs. This figure stood at 7.5 million this time last year. The change is largely down to food prices having risen 4.3% year-on-year, with energy bills also increasing by about 8%. However, whereas only 16% of those surveyed last year thought that the economy would get better over the next year, that figure now stands at 25%. Also, 10% fewer respondents now consider the economy to be in a poor condition.
Nevertheless, the burden of personal debt still hangs heavy, with 4.7 million households making regular use of an authorised overdraft, with a further million making unauthorised overdraft withdrawals. Additionally, according to Credit Action the average UK adult is now in debt to the tune of £3208 when taking such debts as credit cards, unsecured loans, retail finance, motor finance and overdrafts into consideration.
The second recent survey was carried out by R3, the trade body for insolvency professionals. According to this survey, some 50% of the U.K.’s adult population are concerned about their current personal debt levels – this equates to some 20 million people. When last surveyed in February, the figure stood at 42%, showing even more people now seem to be concerned.
Perhaps even more tellingly, 21% of British adults consider themselves to be either ‘extremely’ or ‘very’ worried about their personal debts, compared to only 12% in February. 42% of those surveyed said that it is a regular struggled to make ends meet until their next pay day, with over two thirds saying that the main cause of this is the increase in the cost of living.
The most common types of personal debt which are causing worry among respondents to the survey are credit cards (42%), mortgage repayments (22%) and overdrafts (20%). One of the most worrying statistics from this survey is the fact that 10% of British adults say that they are now only paying the interest on credit card debts, rather than actually reducing the overall debt itself. There is a similar statistic for overdrafts, with 7% of British adults only managing to pay the interest each month.
If you are also concerned about your personal debt and would like advice on how to tackle it, Dissolve Debt are experts in this field and ready to help. It is easy to take our initial quick online consultation, and one of our experienced financial advisors will happily contact you at your convenience.