Debt worries keep one in 10 of us up at night: tips to take back control
The poll by MoneySuperMarket revealed 61% worry more about being in the red than the health of a family member or friend, and 78% said debt worries outstrip anxiety about job security.
Younger generations suffer the most with money-related sleep loss with 16% of 25-24-year-olds saying their debt keeps them up at night, compared with just six per cent of over 55s.
Only 40% of UK adults feel in the control of their own finances, according to the survey.
Despite the challenging economy, Brits took steps to improve their debt management last year, with almost half (48%) managing to reduce their overall debt by the end of the year. In comparison, just 17% of Brits increased their total debt levels in 2018, by an average of £2,700.
People who accrued additional debt blamed the rising cost of living and the cost of making large purchases, such as a car. Buying a greater quantity of non-essential items and not being given a pay rise were also contributing factors.
Tom Flack, editor-in-chief at MoneySuperMarket, said: “With a rise in the cost of living, an increase in bad debt has become the norm as people continue to feel the financial pinch.
“For some of the population, it seems like the cycle of borrowing will never end. However, our research found that only 17% of Brits increased their debt last year and that almost half managed to reduce their overall debt, which is a positive sign. There are a number of ways to take control of your finances and ensure you don’t have sleepless nights worrying about money in 2019.”
Top tips on managing debt
- If you are always overdrawn, you may want to switch your current account to one that offers a free overdraft facility. There are multiple banks that offer such a service.
- If you’ve got stubborn credit card debt, transferring the balance to a card with an interest-free period can really help to ease the pressure and make sure you don’t continually accrue more debt.
- If you are repaying a personal loan (slowly), you can make one-off extra payments on top of your monthly direct debit payments, but you will need to inform your lender first. The Consumer Credit Act 1974 also states that if you have enough in savings and have more than 12 months left on the loan, you can clear it early and incur charges of no more than 58 days’ interest.
- If you have debts on more than one credit line, it may be worth consolidating your debt into one loan. Not only will you pay less interest, but your monthly payments will be easier to keep track of.