83 days of salary needed just to clear interest on debt mountain

As a nation, we have worked the first 83 days of this year just to earn enough money to service the interest on our debts, according to figures from Unbiased.co.uk. This means that so far the nation has not even started re-paying the actual debt itself and thus Wednesday, the 25th March is this year's Debt Freedom Day.

Unbiased.co.uk's figures show that personal loan levels in the UK increased to £11.4 billion in 2008, up by over £1.6 billion compared to the previous year and mortgage debt from equity release loans also increased by £6.5 billion. However, credit card debt decreased by just over £4.9 billion in 2008.

The UK has seen a dramatic fall in interest rates and this should help people service their debt with average interest rates on personal loans now 3.25% lower than they were last year. Debt Freedom Day highlights once again just how much debt we are currently servicing and more importantly how much of our income is being paid out just to pay the interest on our debts, let alone the actual debt itself.

David Elms, Chief Executive of Unbiased.co.uk said: "It takes a date like Debt Freedom Day to bring home just how long we are spending as a nation on debt and it will hopefully spur people into action to do something about their debts.

"Tackling your debt can be a daunting task, but you don't have to do it on your own. With interest rates at a record low now is the time to seek independent financial advice to ensure your money is working as hard as it can and any debt is being repaid as quickly as possible. Seeking independent financial advice is the first step to take control of your debt management - an IFA will take a look at all of your finances to work out the best way for you to pay off your debts."