The average amount of personal debt, excluding mortgage debt, owed by individuals in the UK is £8,431, though it takes an additional £1,300 before it becomes a concern, according to new research from moneysupermarket.com.
On average, men have a 24 per cent higher rate of personal debt than women, owing £9,403 compared to £7,593. Men also allow more debt to rack up before they become worried about their finances, with the average ‘worry tipping point’ being £12,018, compared to £7,547 for women, nearly £4,500 less.
The research went on to find that whilst on average, borrowers worry about their finances when their debt reaches £9,767, only when their debt tips £19,478 do they seek paid advice. The North East had the highest worry tipping point, at a staggering £14,269, more than £4,500 the average total for the UK, and the region would wait until their debt reached £23,677 before seeking paid advice. Nearly half of all Brits (48%) said they would never pay for debt advice.
Tim Moss, head of loans and debt at moneysupermarket.com, said: “Recent changes in taxation limits, removal of certain benefits and the soaring cost of living has seen many the nation’s personal finances squeezed more than ever, and many people will be worrying about their financial situation. Making ends meet is hard enough without juggling debt repayments on top. However, there is no need to suffer in silence and there are many options to make steps in reducing personal debt, before it escalates out of control.
“It is worrying to see that while people become concerned about their debt at £9,767, it takes a further £10,000 to trigger a need to seek debt advice. For most people, paid advice, e.g. a fee charging debt management plan, is a last resort and 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.
“It appears that men take a more lax approach to debt than women and it is worrying that it would take up to an additional £4,500 of debt before they become worried. The research suggests that men are burying their heads in the sand for longer while women are better at trying to face debt problems head on.”
Worryingly, 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. Seven per cent feel debt will always be a burden in their life, leaving them at risk of spiralling debt problems.
Tim Moss continued: “Debt can be hard to shift, and a lump some of nearly £20,000 can be a daunting amount to pay back. Borrowers may feel like they will be forever in the red, but this doesn’t need to be the case. 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. Whatever you do, burying your head in the sand is not an option, especially when there is a range of help available.
“moneysupermarket.com lists only DEMSA OFT Approved Code firms which means you can be confident these companies will treat you fairly, but you should still make sure you fully understand what they will charge you before entering into an agreement.”
Source : Moneysupermarket.com Press Release
