It’s often reported in the media that UK debt is at record levels, and that excess availability of credit is a major problem. Just how far in debt are we as a nation, and is the situation as bleak as it’s often painted?

Debt Levels

• The average UK adult owes £4,144 in unsecured debt
• The total UK personal debt comes in at £1,168bn
• 8% of adults are having financial difficulty
• 2.5m adults have unsecured debts of £10k or more
• 9% of adults find their repayments are eating up over half of their income
• A quarter of those in debt are receiving medical treatment for stress, depression or anxiety

Credit cards

• We owe nearly £58bn on our credit cards, which is more than two thirds of the EU total
• Over 75% of credit card accounts are being charged interest rather than being cleared each month
• Nearly two thirds of adults have a credit card, more than 60% have more than one, and 10% hold five or more

Insolvencies

• 20,461 people were declared insolvent in England and Wales in the last quarter of 2005, up 57.1% from the same period in 2004
• 75% of IVA applications listed ‘living beyond their means’ as the reason
• Around 12-15% of people seeking advice about bankruptcy are under 25 years old, with an average debt of £15,000 each
• The yearly number of individual bankruptcies is the highest since records began

Sources: www.creditaction.org.uk, www.1stop-finance.co.uk

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