Brits Still Paying off Interest on Debts
The first 45 days of the year will be spent by many Brits paying off the interest on their debts, new research reveals.
This highlights the amount people are earning is only enough in this period to cover the interest without the actual debt being paid off, a report by Unbiased showed.
Debt Freedom Day – Tuesday 15th February, will mark the day when borrowers will be free of the interest on their debts this year.
According to the research, personal loan levels in the UK reached over £120 billion in 2010, and consumers built up credit card debt of over £58 billion.
The soaring levels are believed to be partly attributed to the high interest, an average rate of 16 percent last year, being charged.
“With debt levels still remaining at extreme highs there is no better time for people to service their debt and get back in control of their finances,” said Karen Barrett, Unbiased’s chief executive.
“Rather than worrying about it and letting their personal finances spiral out of control, people should instead pro-actively manage their finances.”
Debt Ridden Nation
The Insolvency Service also reported a decrease in the number of personal insolvencies in the last quarter of 2010, but a rise of 0.7 percent overall from 2009.
The effects of the recession are still being felt by much of the nation, as a report by Scottish Widows revealed recently that millions are concerned with their financial security as a result.
The Priorities of Life Index showed that although the recession officially ended in late 2009, 70 percent of British adults are unable to devote enough time to life priorities such as saving for the future.
Eighteen million people admitted they are unable to save enough, and 35 percent fear they are neglecting their overall financial security as they struggle to make their income cover the rise in living costs, as pay freezes and redundancy continue.