Debt Alert: One in ten spending more than they earn

18/03/2010

One in ten British people are living beyond their means, spending more than they earn each month.

That means that a substantial minority of people are getting further and further into financial difficulties and personal debt situation? Take our Debt Calculator test today!'>personal debt every day.

New figures from uSwitch also found that a further 26 per cent of all households only just break even each month, after meeting all their repayments.

Nearly half of those with outgoings in excess of income bridge the gap by using overdrafts, frequently incurring punitive bank charges for doing so.

And a further third rely on borrowing on credit cards, exposing themselves to significant financial risks.

However, uSwitch acknowledged that any attempts by the government to encourage thrift on the part of families could be detrimental to the economy's recovery, if consumer spending were to drop.

EuroDebt director Vance Parsons says: "If 36 per cent of household are scraping by each month or going backwards then it highlights just how sensitive we all are to loss of income or increases in essential expenditure, like fuel, energy, groceries and critical insurance premiums.

"Debt problems can occur very quickly if you have an income or expenditure shock and your budget is very tight."

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