Unsecured debt is on the rise in the UK
Debts due to unsecured lenders peaked for the first time in 2 years in January. The stats from The Money Charity show a considerable rise in payday loans, credit cards, personal loans and overdrafts.
Prior to January 2014, this type of debt had decreased each month for a period of 36 months however the total unsecured debt in the UK now sits at over £160 billion!!
UK’s unsecured debt risesThe Money Charity’s Chief Executive blames mounting financial pressures including rising food and transport costs.
The average UK household debt, excluding mortgages in January was £6,087. This is up £97 from the previous month.
The Chief Executive of The Money Group also added “Consumers may be finding that once they have paid their priority debts, and covered basic living costs, they don’t have the additional funds to pay their unsecured loans. As a result, they continue to incur high monthly interest”.
Eventually something has to give. If it comes down to paying the mortgage and buying food versus paying your credit card then chances are, the unsecured debt that is going to be neglected.
There Are Ways Out
It’s important that everyone is aware of the help available. Seeking help with your debts doesn’t necessarily mean you can’t afford to pay them. Sometimes it’s just a bit of budgeting advice that is required and we’re happy to help with this without any obligation. Debt advice is free therefore you shouldn’t be put off seeking help.
Whether it’s being a bit more savvy when at the supermarket or tracking what you spend over a month there are lots of ways which you can reduce your outgoings. You might find that you spend an awful lot on absolutely nothing. Have a coffee at home instead of hitting Starbucks every morning and you could save over £1,000 a year! That’s crazy!