Some six per cent of Britons do not know how much debt their personal loans, credit card debts and other forms of borrowing adds up to, according to the latest research from Unbiased, suggesting more than 2.5 million British consumers cannot quantify their total debt figure.
Research from the website - designed to emphasise the benefits of independent financial advice for consumers across the country - has reflected that young people aged between 18 and 24 years old may be the worst group when it comes to determining their indebtedness, with 41 per cent unaware of what their total debt figure is to within 500 pounds. For British consumers as a whole, some 15.4 million do not know within 100 pounds their total debt figure, Unbiased has revealed through its research.
The solutions people would use to pay off personal loans and other debt if they found themselves in a debt crisis have also been highlighted through the website’s research. While just fewer than half (48 per cent) would turn to savings to repay debts should they face financial hardship, among the remaining people were listed what the company has referred to as “worrying” techniques for paying back the money they have borrowed. One in five would look to the government to support them in times of hardship, while 19 per cent would begin to sell possessions to repay debts. A further 20 per cent would look to sell their home to lighten the burden of personal loan debt and other borrowing.
Other recent research by the website showed that almost half (48 per cent) of 18 to 24-year-olds would spend an unexpected rise in income on either entertainment or clothes, something that has led to Unbiased calling this group Generation Spend.
David Elms, chief executive of Unbiased, offered that what the website has dubbed Generation Spend is not planning sufficiently for any harsh financial times: “This research shows how little the UK consumer is budgeting and preparing for every eventuality. Generation Spend is allowing debt to dictate behaviour, rather than taking financial control and keeping a check on debts. ” Mr Elms added that tools such as a budget planner or the expert knowledge of an independent financial adviser could help resolve this issue.
The out-of-control borrowing highlighted by Unbiased is not something that has gone unnoticed in the past. Just last month, London Stock Exchange-listed company Alliance Trust revealed that, despite increasing economic pressure on British households through higher utility bills, consumers were still choosing to “borrow big and spend bigger“. This was something the company suggested meant that the message of more expensive living costs was not getting through to members of the public, with mortgage payments, council tax bills and household utility bills all climbing in the last quarter.
Unbiased.co.uk is the website of Independent Financial Adviser Promotion, a firm that has been running for 18 years. The company is sponsored by 30 product provider sponsors, including the likes of Clerical Medical and Prudential, and has around 9,000 independent financial advisers on its database that stretches across the UK.
Steve Smith writes for 1 stop finance shop where visitors can apply for UK debt consolidation loans and also focuses on cheap personal loans and bad credit secured loans for UK residents.