Britons underestimate debt by £100bn

23 July 2007
Many indebted Britons are not completely aware of their personal finance situation and underestimate how much they owe, a new report has suggested.

Research firm Mintel found that the typical consumer thinks they owe only half of what their actual debt total amounts to.

This means there is some £100 billion of outstanding debt that Britons are simply unaware of, according to Mintel.

The firm claims it is therefore no surprise that only 21 per cent of those with unsecured debt admit they are concerned about the amount owed by them.

"While Brits do seem to have a good grasp of their mortgage borrowing, they are wildly underestimating the amount of money they owe on credit cards and loans," said Mintel senior finance analyst Toby Clark.

Juggling credit cards, personal and car loans and possibly an overdraft is more difficult than keeping tabs on a single mortgage, he said.

"Without a detailed understanding of exactly how much they owe and what rates they are paying, it is easy to see how the situation could spiral out of control," he added.

Money education charity Credit Action notes that in the 12 months to the end of April this year, personal debt in the UK escalated by £114 billion.

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