Around 14 Million Britons Owe More Than £2,000 In Debt, With 5 Million Owing More Than £10,000, According To Poll
01 Jan 2020
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- According to a poll, around 9 million people in Britain owe between £2,000-£10,000 and 5 million owe over £10,000 to loan providers.
- An estimated 63% of Britons have entered the new year with debt of varying proportions.
For a country with an estimated population of 66.44 million people, around 5 million are currently dealing with debt of over £10,000, some of which have even crossed the £100,000 mark.
These estimates are not inclusive of the debt owed by people on their mortgage agreements, but instead include debt owed on credit cards, vehicle loans, overdraft, and personal loans.
A little over 2,000 Britons falling between the age bracket of 16-64 were polled as a sample representative of the entire population, which revealed that around 20% of the total population could be carrying debt exceeding £10,000 at this time.
According to Baroness Altmann, who used to work as a work and pensions minister, the findings are extremely shocking and must ring alarm bells for both regulators as well as financial service providers to review the increasing household debt numbers to figure out a way to contain or reduce it.
Figures reported by the website Money.co.uk have revealed that the people of London collectively carry the most debt in all of Britain at this time. On average, Londoners hold a debt figure of £19,656 per person. Interestingly, the people of Scotland seem to be doing a much better job when it comes to maintaining their financial health, with around 45% of the population carrying no debt at this time.
The most concerning findings of this poll relate to the reasons why these loans were sought. Around 40% of study participants borrowed to meet everyday expenditure, and 21% said they needed to borrow to pay off other loans. 20% said they also borrowed to fund holiday expenditure with 18% saying that Christmas took a toll on their personal finances. 18% even admitted that they borrowed simply to purchase luxurious items. 10% of respondents were still carrying debt they had acquired last year to pay for Christmas expenses.
However, the fact that 40% of people borrowed to fund everyday expenses indicates that perhaps the cost of living has increased beyond affordable levels in the UK. 38% of the people are carrying credit card debt, 19% on personal loans, and 19% have an overdraft on their bank accounts.
According to Altmann, employers should become more involved in helping their employees manage their debt, which can happen in the form of increased financial education or at-source salary deduction that can go directly towards loan repayment.
There are also slight differences between the amounts men and women have borrowed. For men, the average debt figure stands at £3,138, while women carry debt that is £300 smaller. Those between the ages of 35-44 had £4,076 in debt, while those in the 16-24 age bracket carry £1,784, on average.
Another research conducted by Bo, a digital bank, revealed consumer spending patterns after analysing 750,000 accounts being operated by its customers at NatWest, a sister bank. According to this study, around 50% of people spent their entire income by the end of every month, making no savings or investing anywhere. Another 25% used their savings or subscribed to debt simply to pay for their lifestyle.