Brits shorten debt sentence
Over a third (35 per cent) of Brits have reduced their debt levels in the last year according to research from MoneySupermarket. The average amount of personal debt, excluding mortgages, is £6,926, a reduction of £1,500 since last year. On average, men have a 37 per cent higher rate of personal debt than women, owing £8,061 compared to £5,869.
However, not everyone has managed to reduce their debt burden, as over a quarter (27 per cent) of Brits with debt have had to increase their total amount of non-mortgage borrowing in the last year. Although more people in the red are paying down debt than increasing it, one in three (38 per cent) are still worried about their debt levels.
The research went on to find that 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. This extra debt would go as far as causing stress for almost half (46 per cent) and sleepless nights for over a quarter (27 per cent).
One in ten (10 per cent) can only afford to make the very minimum repayments to resolve their debt, meaning they will be paying over the odds in interest on their debt for a very long while. Six per cent feel debt will always be part of the way they lead their life, leaving them at risk of never escaping the debt trap.
Tim Moss, head of loans and debt at MoneySupermarket, 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.
"For those who are feeling very worried about the burden of debt there are support services available. Consumers should explore do-it-yourself solutions and fee free debt advice from some of the many debt charities such as the Consumer Credit Counseling Service (CCCS), Money Advice Trust or Citizens Advice Bureau. Tackling debt can be difficult, and however big or small the amount can feel like a daunting task. Borrowers may feel they are trapped in a cycle of debt but there are ways to break it. It is always worth speaking directly to your creditors to try and come up with a suitable repayment plan, but for those who can no longer control and service their debts, a debt management company could be an alternative option; but it's vital that you compare the best solutions available to suit your circumstances."