In the red: Britons have £139bn in unsecured debts
British consumers collectively have nearly £139bn in unsecured debts, according to a report from MoneySuperMarket.
The comparison site said people are increasingly turning to credit in the forms of a credit card, personal loan, overdraft, store card or a finance agreement.
A third of people admit to having one type of unsecured debt, while nearly a fifth state they currently have two. A further nine per cent confessed they had all three types of unsecured debt.
The report found that credit cards are the most popular form of credit, with 46% of people owing money on one. This is followed by overdrafts (24%) and personal loans (11%).
The average amount people owe on unsecured credit is £4,412 each, with those aged between 18 and 24 relying on credit more than any other age group, owing £5,446 on average – the biggest debt of all age groups.
While half of those in debt (50%) owe the same or less than they did last year, a worrying 43% now owe more, while 22% of people did not owe any money last year but now have debts of £1,182 on average.
But Brits are not feeling overwhelmed by their borrowing, with nearly two thirds expecting to clear their debts within a year, and a further 12% expecting it to take one to two years.
Kevin Mountford, head of banking at MoneySuperMarket, said: “With such a large proportion of people owing money on credit cards, loans, overdrafts and many other unsecured credit vehicles, it should be noted that while rates are low at the moment, and the cost of borrowing is the cheapest it has been in a very long time, rates will go up at some point.
“Those who have fixed rate products are in a more fortunate position, however their fixed rate won’t last forever. Regardless of whether you have fixed or not, I would suggest trying to pay down as much debt as you can now before rates do start to climb.”