Uk Consumers Start Clawing Their Way Out Of The Financial Debt
Pit
Another year ended, and another round of UK debt statistics
CreditAction has just announced the latest summing up of the
personal debt situation in the UK
Their figures show that the end of 2005 has seen the total level
of personal debt rise to an astounding £1,158bn, an increase of
£100bn compared with the same time last year, and this debt is
increasing at a rate of £1m every 4 minutes
These levels of debt affect everyone in the country, and have
become a way of life The average household debt is £46,863
including mortgages or £7,786 including overdrafts, finance
deals, credit cards and unsecured loans, but excluding mortgages
To break this down further; CreditAction report that the average
UK adult owes £4,125 excluding secured loans, or £24,833
including mortgage loans
The Financial Services Authority (FSA) are seeing distressing
signs from struggling consumers, as the rates of insolvencies,
late credit card payments and mortgage repossession orders are
all increasing The Citizens Advice Bureau and Consumer Credit
Counselling Service have both received record numbers of people
calling their debt advisory services after finding they were
struggling to pay back what they owe, with 9,310 calls taken
during the first nine working days of 2006 One in 10 single
people are reported by CreditAction as saying their finances are
out of control, and according to a leading mental health expert,
Dr Roger Henderson, 43% of the adult population in the UK are
affected by money worries with 1076m people suffering
relationship problems because of their money worries
The surge in those contacting the debt services for help has
been put down as a positive effect by the National Debtline, as
they have attributed it to an increase in public awareness on
financial matters and a knowledge that help is available rather
than a jump in the general debt levels
The growth in consumer financial information in newspapers,
television and websites like Moneynet (
and The Motley Fool (
helped to raise the public awareness on many financial issues
Consumers can now find guides on financial services and can even
quickly compare loans, credit cards, mortgages, insurance and
other finance products on a like for like basis to obtain the
best rates for services This is making it more difficult for
expensive finance providers to find customers, but as consumers
become more finance savvy; many providers are seeking to protect
their profits through alternative methods Many credit card
providers have started introducing charges for consumers
changing credit card companies in an effort to reduce the threat
that “rate tarts” pose to their profits The credit card and
financial services are also cracking down on those who make late
repayments, breach overdraft limits or try to repay their debts
earlier than previously agreed
The general pattern however from the most recent data from the
Bank of England looks to be that the appetite for debt among
consumers appears to be waning, and greater attention is being
paid by consumers to their own personal finances The fact that
2005 saw nearly one in twenty consumers racking up £100+ in
financial penalties and charges making up £553m of unnecessary
financial wastage going to the lenders, means that there is some
way still to go if UK consumers are to regain control of the
spiraling debt crisis
Disclaimer: All information contained in this article, is for
general information purposes only and should not be construed as
advice under the Financial Services Act 1986
You are strongly advised to take appropriate professional and
legal advice before entering into any binding contracts
Useful resources: Moneynet comparisons (
The Motley Fool (
Tags | citizens, credit, debtline, household, problems, relationship, repossession, services, situation, statistics
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