Recent statistics reported in the Independent show that being unable to clear personal debts is a big concern amongst the British public, with a third of individuals believing that they will not be able to clear their debts in their lifetime.
In particular, concerns seem to lie within the 18-24 age bracket, who think that they will face a lifetime of debt. According to the Independent, students graduate with an average debt of £46,000 but students from the poorest backgrounds graduate with debts of more than £57,000. 81% of students will never completely clear their debt. This immediately sets them back before they’ve even begun their career.
With the British public collectively spending an average of £900 more per household than what they earn each year, debt levels across the country are growing and according to the Office for National Statistics are at a record high. Figures revealed an even more of a miserable reading for the South West, a region which was identified as having higher personal insolvency rates than the national average, which we blogged about here. Personal insolvencies are only predicted to worsen and are set to grow by 17% this year, with the main contributing factor being record levels of consumer borrowing.
Is debt the new norm – something expected and something to get on with?
A lifelong relationship with debt is becoming more and more common as credit cards are prevalent, as well as pay day lenders (which we have also blogged about) and student loans etc. The high cost of student debt and housing on the market have normalised debt. The consequences of a life time of debt are worrying and could leave individuals struggling in old age. Gone are the days when young people could expect to get on the housing ladder and see their wealth increase almost by default.
Whilst debt may be a manageable cost whilst individuals are earning, the Independent has reported research showing that unsecured debt among 55- to 74-year-olds has risen by more than a third over the last four years, more than twice as fast as the national average. And the most common form of debt for this age group is credit cards, with 30% spending more than they pay off each month. More and more people are using pension freedoms to pay off debt when they turn 55, which has an impact on well-being in retirement.
We can help
There are a number of options available to individuals who are struggling to cope with their debts. If you require advice on solvency or cash flow problems please get in touch with our team of experts on 01392 667000.