Increasing debt mountain leaves many Britons anxious and in denial

04 June 2008 / by Daniela Gieseler
While the number of Britons worried about their ability to manage their debt is on the rise, others remain blissfully unaware about their level of debt, new research from MoneyExpert.com and CreditExpert.co.uk revealed.

In its Debt Index, the financial comparison site MoneyExpert.com measures how well people with mortgages, loans or credit card debt are coping with their borrowing and monitors whether if the level of debt is rising or falling.

The number of people concerned about their debt rose from 33 per cent to 38 per cent in the last three months alone, as soaring food and energy costs seemed to take their toll on consumers. Around eight per cent stated they were very concerned about their ability to repay their debts.

By contrast the number of Brits who were either unconcerned or not very concerned has decreased from 41 per cent in the previous quarter to 36 per cent in the current quarter.

MoneyExpert.co.uk also believes that, with the dramatically increased cost of living, a lot more of the 13.1 million people with debt have had to increase the amount of money they borrowed in the last quarter.

While in the previous quarter around 27 per cent of debtors said they had to increase their personal debt, the figure rose to 32 per cent in past three months – as opposed to only 24 per cent who successfully cut their outstanding debt.

Sean Gardner, Director of MoneyExpert.com, commented: "With close to forty per cent of those who owe money worried about their ability to stay on top of their debts, these latest figures add up to a collective cry for help as Britain's enormous debt mountain looms larger than ever."

"Anyone with genuine concerns about paying the bills needs to take action to avoid finding themselves in even more difficulty," Mr Gardner added.

"There are many ways to get your finances under control, from getting a debt consolidation loan to just juggling your borrowing onto cheaper products. But the important thing is to work out a repayment plan and not bury your head in the sand."

Another survey by CreditExpert.co.uk reveals that many Britons seem to be in denial about the level of debt they are in. Although 96 per cent claimed to be familiar with their finances, many respondents seemed ignorant when questioned further.

Only 26 per cent knew exactly how much they had left to pay on their loans, a further 20 per cent only plan their finances every six months or less, and 10 per cent even admitted to having no idea about how much debt they were in.

"It's alarming to see that while almost the entire UK population think they are on top of their finances, many aren't," Jim Hodgkins, Managing Director for CreditExpert.co.uk, said.

He urges consumers to take control of their finances: "Keeping track of your commitments and planning for the future are always important and in addition to checking bank and credit card statements, you also need to regularly check that your credit report is accurate and up-to-date."

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