Brits shorten debt sentence, but still trapped by financial worries
According to a report by price comparison site, Moneysupermarket.com, over a third of Brits reduced their average amount of personal debt, excluding mortgages, by a £1,500 since last year.
The report also highlights that not everyone has managed to reduce their debt burden, as over a quarter of Brits with debt have had to increase their total amount of non-mortgage borrowing in the last year.
Tim Moss, head of loans and debt at MoneySupermarket.com, said: “It’s encouraging to see consumers showing prudence and looking to pay down their debt. However, with the economic outlook continuing to remain uncertain, many Brits are feeling very concerned about their current financial situation.”
“Reviewing all of your outgoings to see where you can make savings can really help free up cash which can be used to pay off your debts. In fact, families can save £1,000 on all of their household bills by switching providers – including energy bills, home and car insurance.”
“If you have a credit card then switching to a zero per cent interest product may help in the long term – it allows you to pay off your existing balance over time without accruing additional interest, but make sure you repay on time each month otherwise you will lose the promotional deal.”
On average, men have a 37% higher rate of personal debt than women, owing £8,061 compared to £5,869. Although more people in the red are paying down debt than increasing it, one in three are still worried about their debt levels.
One in ten can only afford to make the very minimum repayments to resolve their debt, which could mean that they will be paying over the odds in interest on their debt for a longer period.
Six per cent of those who are in debt feel that it will always be part of the way they lead their life, leaving them at risk of never escaping the debt trap.
Moss added: “For those who are feeling very worried about the burden of debt there are support services available. 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. Tackling debt can be difficult, and however big or small the amount can feel like a daunting task.”
“Borrowers may feel they are trapped in a cycle of debt but there are ways to break it. 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.”