Debt not serious until it hits £14,000
Brits don’t consider themselves in serious debt until they owe more than £14,416 according to insurance company Bright Grey.
Although this may sound excessive, it reflect a significant improvement from a year ago when £15,837 was the point at which people started to consider them themselves in serious financial difficulty.
Bright Grey’s ‘financial safety net’ report highlighted a significant change in attitude to personal debt.
In the face of the economic downturn and rising unemployment, consumers are more aware that servicing high levels of debt would present problems if their personal circumstances change.
Rising unemployment was a key concern among those surveyed, with 40 per cent citing unemployment as the factor most likely to affect their standard of living.
Serious illness was the main concern for 39 per cent of respondents.
Roger Edwards, proposition director at Bright Grey, said: “Over the past 12 months, Britons are sitting up and taking greater notice of the wider economic environment.
“People are more wary about getting themselves into serious levels of personal debt, but over £14,000 is still clearly a cause for concern.
“As a result, Britons need to keep control of their finances and have contingency plans in place to be able to continue to pay for their essential monthly outgoings.”
This month’s Debt Statistics from national money education charity Credit Action show that the trend for household debt to fall has stalled.
From February 2011 to December 2011 average household debt (excluding mortgages) fell by £18.50 per month.
However in January 2012 household debt (excluding mortgages) increased by £53.
The latest statistics from the charity confirm that the fall in household debt has stalled, with a fall of just £3 recorded in February.
Michelle Highman, CEO of Credit Action said: “Prior to January, we’d witnessed an encouraging long-term trend of falling average household debt (excluding mortgages).
“Unfortunately, since then it seems to have stalled. These developments show the importance of staying on top of your money.”