Whilst the average Briton predicts it will take them a decade to be able to clear themselves of their current financial debt, more than a third believe that their overreliance on credit cards, loans and generous overdrafts means they will live the rest of their lives without becoming ‘debt-free’.
Photo: PA
The team behind money-saving website www.MoneySavingHeroes.co.uk conducted the research as part of an ongoing study into the attitudes of Britons’ personal money management.
Initially, all of those polled were told to ignore any mortgages or outstanding student loan debt and asked if they were in debt, to which the majority stated that they were. When asked how much they were in debt by, the average amount emerged as £6,500, with almost a third confessing that they were in debt by £10,000 or more.
When asked to predict how long it will take them to clear their existing debt, taking into account their current repayment plan, 47% confessed that it will take them at least 10 years to become debt-free, followed by 5 years, 2 years and 1 year. When asked if they think they were going to be in debt for life, 40% admitted that they feared they would be.
All respondents were then asked if they had access to a credit card, to which three in four said they did. A further third admitted that they were overdrawn on at least one credit card and only one in ten stated that they are committed to paying off their credit card statement in full every month.
When asked what had caused their debt and asked to select all that applied to them, the top causes were found to be:
- Shopping habits (overspending on credit cards, opening store accounts, impulse buying, etc.) – 72%
- Gambling – 64%
- Divorce – 54%
- Going into an overdraft – 42%
- Unemployment -31%
Finally, when asked if their partner or spouse knew about their debt, 15% of those polled confessed that they did not. What’s more, one in four of these individuals admitted that they had opened a ‘secret’ bank account so that the debt would be hidden.
George Charles, spokesperson for www.MoneySavingHeroes.co.uk, commented:
“Getting into debt is sometimes unavoidable but when it’s due to poor money management and lifestyle choices such as gambling, it can land you into big trouble. With discounts widely available and having spending caps on credit cards, even taking the smallest steps can lead to a big difference to avoid getting into further debt. What’s more, financial advisors can offer support around budgeting if you feel you’re at the point of no return.”