- 1 in 4 indebted Britons struggling to meet repayments -

(London, 03/05/07) According to the latest quarterly research published today by leading debt consultancy, Thomas Charles (www.thomascharles.com), problems with debt increase with age.

According to research conducted in April 2007 in conjunction with YouGov, those in over £10k of unsecured debt reporting some likelihood of insolvency (‘quite likely’ – ‘certain’) rises steadily from just under 1 in 10 18-24 year olds (9%), to almost a fifth of 35-44 year olds (18%), right up to almost a quarter of 55+ year olds (24%).

The increase in financial commitments that comes with age is also reflected in the numbers experiencing regular repayment problems (‘quite frequently’ > ‘every month’). The proportion rises steadily from 14% of 18-24 year olds, to almost a quarter of 35-44 year olds (24%), up to almost a third of 55+ year olds (32%).

This means 55+ year olds are 167% more likely to go insolvent and 129% more likely to experience debt repayment problems than their 18-24 year old counterparts.

Looking at the figures overall, 1 in 4 (25%) indebted Britons are now struggling to meet repayments. Those in over £10k of unsecured debt reporting regular debt problems (‘Quite frequently’ > ‘Every month’) increased by 9% since the last quarter (from 23% to 25%), and by 19% (from 21% to 25%) year on year.

The proportion of people in over £10k of unsecured debt facing insolvency has also increased. Year on year, the number reporting some likelihood of insolvency (‘Quite likely’ > ‘Certain’) rose by 38% (from 13% to 18%).

James Falla, Director of Thomas Charles, commented:

“The age trend identified in this latest research is very much supported by what we see every day at Thomas Charles. As age increases, so too do expenses and financial commitments.

A young person’s life, for example, might typically take the following route: entering into a relationship, moving in together, taking on more rent or a mortgage, an expensive wedding, perhaps the car on HP, and eventually, the expense of children and the likely reduction of income that goes with it. Unfortunately, divorce is also a very expensive, but all too common, life event that can cause serious financial difficulty, particularly in older people.

It’s not surprising, that we are also seeing a general increase in the number of people struggling with debt and considering insolvency. Debt is still a serious issue in Britain and as long as people continue to take a ‘buy now, pay later’ approach to the expenses of life with little thought for saving for a rainy day, there will be an inevitable portion of the population that will run into financial difficulty.

Nevertheless, when the DTI’s latest insolvency stats are released on Friday 4th May, I would not expect to see the great leap in insolvencies that we saw during the same time last year. This is partly due to a tightening of criteria by creditors in their acceptance of IVAs, but also partly because we appear to be approaching a more level ‘run rate’, having cleared much of the historical backlog of people in serious difficulty that built up before insolvency became a well-known option.”

Consumers wishing to contact Thomas Charles for advice on debt can do so via the company’s website (www.thomascharles.com) or by phone on 0800 072 5988.

CONSUMER DEBT:

Key stats

55+ year olds are 167% more likely to go insolvent than their 18-24 year old counterparts;

They are also 129% more likely to experience debt repayment problems;

1 in 4 (25%) indebted Britons are now struggling to meet repayments;

Number of indebted Britons facing insolvency has risen 38% year on year.

Top tips

Don’t bury your head in the sand. Try working out your financial position using the debt-help-uk.org.uk ‘debt wizard’.

Consider transferring credit card debt to a 0% card while you deal with more pressing bills, such as any council tax or mortgage payments. But don’t use this as an excuse to run up more debt elsewhere.

Don’t take out other loans to pay off the original debt or use a consolidation loan. If you must do this, be disciplined and don’t use the new loan money for anything else. Talk to your creditors about structuring a realistic repayment plan.

If you cannot do a repayment plan and you do not want to go bankrupt then try an IVA. Visit IVA.co.uk or call the IVA helpline (0800 197 48 38).

If you want to consider bankruptcy then try the Citizens Advice Bureau (citizensadvice.org.uk)