70% of Brits have problem debt, yet many in denial
By UK CreditCards.com
Seven in 10 Britons are experiencing debt problems, according to research from the Co-operative Bank. Half have increased their levels of credit card, overdraft and unsecured loan debts over the past 12 months.
Debt levels on the rise
According to the bank's poll of 1,510 consumers, debtors have typically accrued £325 in extra debt since Christmas. When asked why their borrowing levels had increased, 28% of respondents mentioned the rising cost of living, 28% cited high energy bills, and 16% blamed rising fuel costs.
Alarm not triggered until £1,250 is owed
The survey found that the average person does not think he or she is in trouble until the amount owed in credit card debt, loans and overdrafts reaches £1,247. The findings suggest that people are either denying or ignoring their debts, attempting to rationalise why they have debts, or putting off dealing with them.
"It's no surprise that people are feeling the pinch at the moment and that debts are mounting up," said Robin Taylor, head of banking at the Co-operative Bank, in a news release. "But what is surprising is that many people are choosing to ignore their debt. Our research also shows that the 'debt alarm' doesn't go off until people owe more than £1,000, which can be a real struggle to pay back."
Brits urged to face their debts
Many people have been letting their money troubles get on top of them, with 60% of survey respondents admitting to sleepless nights and 30% admitting to anxiety attacks. The findings indicate that people need to take a proactive approach in dealing with their debts.
"Managing your money with steps such as writing a list of incomings and outgoings and regularly checking your bank account will help you get on top of your finances now before problems get any worse," Taylor advised.
Published: 12 March 2012
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