Debt in the UK

It’s easy to get despondent about debt. Debt is a big issue in the UK at present, both nationally and individually. Statistics make for difficult reading, but there are solutions out there.

As has been much reported, the national UK net debt is in the trillions of pounds, an almost unimaginable number. The interest alone per day on this amount is close to a staggering £125million, an amount set to increase over the next few years.

Closer to home, the numbers are also daunting. In 2010, the average household owed more than £8650 in debt, excluding mortgages. Including mortgage debt, the amount the average household owed increased to more than £57,809.

Mortgage arrears and repossessions are still a large cause for concern; in the first quarter of 2010, 107 properties were repossessed every day. These issues of course are exacerbated by levels of unemployment and redundancy. Figures for the first part of 2010 show more than 1,000 people being made redundant every day.

Alongside the difficulties of debt comes the issue of CCJs (County Court Judgements). In the first three months of 2009, it was estimated that 2,000 CCJs were made every day.These come into play if you owe money to a creditor and they have made a claim for payment through the courts. A CCJ is issued if their claim is upheld and you are ordered to make repayments of the debt. This will be either agreed between you and your creditor, or if this cannot be agreed, the repayment will be set by the court. Anyone with a CCJ against their name will find it difficult to obtain credit.

Two debt solutions that have increased in public awareness in recent years are bankruptcy and Individual Voluntary Arrangements (which is a formal agreement between you and your creditors where you make reduced payments to clear your debt. Generally after 5 years, your debt is considered to be settled). Almost every minute in the UK, someone is declared either bankrupt or insolvent. But these measures are not the only solution to debt and should really be considered a last resort.

The first step is to face the debts, find out exactly how much you owe and look at realistic and affordable ways of reducing it. One possibility is to consolidate your debts; bringing them together within one loan with as low an interest rate as possible and manageable repayment terms. This is something our independent financial advisers can help you with. Contact us today to speak in confidence to an adviser who will listen to your circumstances and work to find a solution for you.

We will be happy to help you and initial consultations are free of charge or obligation.

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