Debt worries on the rise
Increasing numbers of people who owe money to banks and finance companies are concerned about their ability to manage their debts, research from MoneyExpert reveals.
The independent financial comparison website says 38% of people with debts say they are concerned about whether they will be able to repay the money they owe, a figure that has risen by 5% from 33% in the previous quarter.
With the cost of living rising dramatically, MoneyExpert says even more people with debts have opted to increase the amount of money they have borrowed in the past three months.
In the quarter to February, around one in four debtors said they had chosen to increase their personal debt in that period. However in the last three months some 32% of people with debts, around 11.06 million people, claim to have piled yet more credit onto their personal debt mountains.
MoneyExpert believes the rising cost of living – surging food and energy bills prompted the biggest one-month jump in Britain’s inflation rate for almost six years this May – is beginning to take its toll on consumers who have debts to repay. And as house prices continue to fall, the website says consumers can no longer rely on increasing the equity in their home to cover outstanding personal debts.
Sean Gardner, director of MoneyExpert, said: “There are many economic and political measures of a downturn, but there is nothing quite as real as people in debt saying they can’t repay the money they owe.
“With close to 40% of those who owe money worried about their ability to stay on top of their debts, these latest figures add up to a collective cry for help as Britain’s enormous debt mountain looms larger than ever.”
The MoneyExpert Debt Index measures how well people with personal debt – including mortgages, loans and credit cards – are coping with their borrowing and monitors whether levels of indebtedness are rising or falling.