Heavy debtors 'growing in number'

18/02/2009

Unsecured debt repayments are taking up over half the income of almost one in ten people, according to Callcredit.

The credit report firm said that the number suffering from debt in this way has hit eight per cent, up from six per cent in August 2008 and the two per cent measured in August 2007.

Among young adults (25 to 34 year olds), there has been a sharp rise in the heavy debtors, with 12 per cent spending half their money on the loan and card repayments compared to six per cent last August.

Owen Roberts at Callcredit said: "The worsening economic climate is having a clear effect on consumer attitudes and behaviour.

"The increasing proportional spend on unsecured debt paints a concerning picture of consumer finances within the UK and this level of debt servicing would appear to be unsustainable."

EuroDebt director Kevin Still added: "Sadly the report reflects the reality that many households are using credit to make ends meet. Many recognise that this position is not sustainable and that interest charges will catch-up with them, but they feel there is no alternative. Huge rate increases by many of the credit card issuers have not helped this situation.

"There are alternatives and for many that means taking professional advice to present a co-ordinated approach to their creditors to try and reduce their monthly payments to a level that is affordable and not rely on future use of credit cards. Repayment proposals need to be structured in a consistent and equitable manner to the right hardship department."

Further findings from the Callcredit show that around two-thirds of UK adults are now more concerned about their personal finances than they were a year ago.

Tags; Income Worries and Debt, Credit Card Lifestyle,

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