Is Britain’s debt problem worse than we realize?
August 20, 2007
According to a recent report collective debt levels in Britain could actually be around £100 billion more than most people realize.
According to some industry professionals many consumers owe far more than they realize on credit cards, store cards, and other finance, and are simply trying to ignore the problem and failing to monitor how much they actually owe. Collectively, this could mean that Brits owe around £100 billion more than they think, with many owing twice was much as they think they do on finance such as credit cards.
Figures indicate that the average Brit thinks they owe just over £5000 in unsecured debt, but the figures from the Bank of England show that this figure is actually closer to around £10,300. Only 20% of consumers with unsecured debt stated that they were worried about their debt levels, although figures show that around 43% of adults in Britain have some form of unsecured debt such as store cards, credit cards, and loans.
Those with mortgages had a clearer idea of their debt levels, and a survey showed that consumers with secured debt were not far off the mark with their estimations of debt levels. Most mortgage payers thought they had average debts of just over £92,000 and the actual figure from the Bank of England was £95,000.
One finance analyst stated: ‘While Britons do seem to have a good grasp of their mortgage borrowing, they are wildly under-estimating the amount of money they owe on credit cards and loans. Clearly, it is a lot easier to keep an eye on a single mortgage, than it is to juggle a couple of credit cards, a personal loan, a car loan and maybe even an overdraft as well.’
Alan Wright
20th August 2007
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