Debts Concerning One in Three
Wednesday, February 20th 2008
A third of Brits are now concerned about their ability to manage debts, as the credit crunch and rising cost of living catch many out.
Despite fears of an economic slowdown, 27 per cent of people have increased their borrowings in the last three months, according to data from MoneyExpert.com.
Christmas shopping on credit cards has been blamed for the rise in debt - with 47 per cent of adults now owing cash on their cards - a 14 per cent rise.
Smaller rises were also recorded of those with overdrafts and personal loans.
With this rising debt, some 33 per cent of adults are concerned or very concerned about their ability to keep on top of debts.
Meanwhile research by Friends Provident reveals two-thirds of people are planning to tighten their belts over the coming year – with cutbacks on socialising, hobbies and general spending expected.
"The fact that one in three people who owe money are concerned or very concerned about their ability to manage their debts is worrying," said Sean Gardner, chief executive of MoneyExpert.
"The interest rate cuts in December 2007 and this month will help but it remains the case that borrowers have to take action themselves."
He urged anyone worried about debts to act early.
"There are many ways for people to get their finances under control. Whether you need to consolidate your debts with a loan or just juggle your borrowing onto cheaper products, the important thing is to work out a repayment plan and not bury your head in the sand," Mr Gardner concluded.
Figures from the Bank of England show Britons now owe £1,409 billion – with £1,185 billion secured on properties and £223.7 billion owned on overdrafts, credit cards, and personal loans.
