Britain needs 83 days to pay interest on debt

| March 26, 2009 | 0 Comments
Britain needs 83 days to pay interest on debt

British workers can today start reducing their personal debt as it will have taken them until yesterday to pay back the interest.

Personal debt is so high in Britain that it would take the whole country 83 working days - or 1st January to 25th March - just to fund the interest payments.

Total debt through credit cards, loans, and additional borrowing against homes now stands at £88.5 billion.

This figure was calculated by Unbiased.co.uk who found that the UK’s personal loans increased to £11.4 billion in 2008, £1.6 billion more than during 2007.

In the same year, mortgage debt from equity release loans increased by £6.5 billion, although credit card debt fell by £4.9 billion to £59.8 billion.

Unbiased.co.uk chief executive, David Elms, said the figures show just how deep in debt the UK actually is.

Elms hopes that facing up to the problem will ‘spur people into action’.

He said: “Tackling your debt can be a daunting task, but you don’t have to do it on your own.

“An independent financial advisor will take a look at all of your finances to work out the best way for you to pay off your debts.”

He added that with the Bank of England’s base rate at a record low, ‘now is the time’ for consumers to service their debt.

The average interest rate on a personal loan is 3.25% lower than it was 12 months ago.

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