LONDON, December 31, 2019 / PRNewswire / – More than half of Britain’s adult population (almost 27 million), will head towards 2020 in debt, with nearly five million** due to over £ 10,000 in loans and credits, according to a survey conducted by argent.co.uk.
The financial comparison website surveyed 2,018 people living in the UK, aged 16 to 64, and found that, excluding mortgages, almost two-thirds (63%) will start the new year with some form of personal debt – including money owed on credit cards, personal loans, auto loans, bank overdrafts and payday loans.
Of the 42.7 million people aged 16 to 64 in the UK *, 26.9 million people are potentially in debt for the new year, up to £ 100,000.
The survey also found that a third (33%) of respondents have personal debt of between £ 2,000 and £ 10,000; it’s nine million people. While nearly a fifth (18%) said their personal debt was over £ 10,000, which equates to 4.8 million adults in the UK struggling with this level of debt.
More than a quarter (26%) of those interviewed, from the North West, said they would enter 2020 with personal debt of between £ 5,000 and £ 10,000, while more than a fifth (21%) of respondents from Wales said 2020 would start with debts between £ 10,000 and £ 50,000.
Meanwhile, nearly half of the Scots (45%) will not go into the new year with no debt. This compares to just 30% of Londoners no longer in debt at the start of 2020.
Visit www.money.co.uk/content/debt to view the interactive UK debt map.
Types of personal debt
More than a third (38%) of respondents reported having credit card debt, 19% Personal loan, 19% overdraft, 12% car loan and 6% payday loan.
The average credit card debt of respondents is £ 2,966, with men (£ 3,138) owe over £ 300 more than women (£ 2,793). Respondents aged 35 to 44 have an average debt of £ 4,076 vs £ 1,784 for 16-24 year olds.
Half (50%) 35-44 year olds owe money for plastic, compared to just over one in five (23%) 16 to 24 years old.
Almost three quarters quarter (74%) of people polled with credit cards said they don’t pay off the full balance each month, while a fifth (22%) make the minimum payment or less.
Causes of debt
When asked what their debt was owed, four in ten (40%) normal living expenses declared, 21% said debt consolidation, 19% attributed their debt to vacations, 18% to pay for Christmas, 18% due to spending on luxury items, 12% pay off the debt accumulated from previous Christmas spending and ten% about helping others get out of debt.
Salman Haqqi, personal finance expert at argent.co.uk, comments:
“It’s sobering to think that nearly 27 million people will be heading into 2020 with thousands of pounds in personal debt – a number that shows no signs of abating any time soon.
“It’s alarming that almost half of people never move their debt to take advantage of better interest rates, which could save them hundreds of pounds a year and help them pay off their debts sooner. 0% balance transfer cards are a good solution. way to manage debt as they remove the extra pressure of interest from your monthly payments.
“One of the most concerning research statistics is that 40% of people go into debt to pay for essential household items, simply unable to afford the cost of living with their regular income.
“Over four million people have between £ 10,000 and £ 50,000 in personal debt on average, which is a huge burden to bear, especially if circumstances change and they find themselves out of work.
“It is always worth going online and researching your options, especially at the start of the new year, as there may be cheaper alternatives and a solid supply from lenders. . “
Growth and debt repayment
Almost half (46%) of respondents say they have accumulated a personal debt over several years and believe that it will take them on average three years to repay it. While, 34% said it had accumulated over the past 12 months.
On average, people have been in debt for two and a half years, but a fifth you owe the money for four years or more. 1.3 million people (5%) have been in debt for seven years or more.
One in six (16%) of respondents believe it will take seven years or more to repay their debts, and 8% admit that they don’t know when they will pay off their debts.
According to the survey, people allocate nearly a quarter (22%) from their monthly salary, on average, to debt repayment. Two-thirds (67%) try to pay their debt on their own, 13% try to solve their problems by consolidating their debts in one place to make repayments more affordable, while 15% have borrowed from their partner and / or family members.
Respondents say they save £ 190 on average each month, but just under a third (31%) say they are only able to save £ 50 or less.
For those who are struggling with debt, Advice to citizens has specialized financial advisors, while other organizations that can help include Stage change, Debt Advice Foundation, National debt and Shelter.
Notes to Editors:
Argent.co.uk surveyed 2,018 UK residents, aged 16 to 64, during November 2019.
* According to the latest employment figures (July to Sep 2019) of the ONS, there is 32.75 m people, 16 years and over, in employment, 1.31m unemployed and 8.62m economically inactive. It is 42.68 m of working age.
Socket 42.68 m than the number of people aged 16 to 64. If 63% of respondents aged 16 to 64 enter 2020 with some form of debt, that’s 0.63 *42.68 m = 26.9 million of them in debt in 2020.
** According to a survey, 18% of those surveyed have personal debts between £ 10,000 and £ 100,000. This means 18% of 26.9 million = 4.8 million people.