Transact: If you’re facing repossession, get advice

Homeowners who are facing the prospect of repossession need to seek advice, according to Transact, the independent network committed to promoting financial inclusion. Read more

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Up to five out of six UK consumers fear for their finances

Up to 30 per cent of British spenders do not think they can cope much longer when it comes to managing the pressures surrounding their finances, according to new research.

Findings from a survey conducted by moneysupermarket.com during the budget week reveal that only 84 per cent of those questioned said they had no financial worries.

Additional research showed that Brits owe more than £1.3 trillion on loans, credit cards and overdrafts.

Tim Moss, head of loans and debt at moneysupermarket.com, said he was surprised by the levels of financial worry among UK consumers.

“There is little doubt many Brits will find their annual road tax as high as the value of their car as from next year, creating a massive headache for people who are really struggling,” he continued.

Moneysupermarket.com added that those spenders who are worried about their spending habits should take action rather than burying their head in the sand.

The firm recently said that consumers are becoming increasingly aware of having a good credit rating with more and more checking their financial status.

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‘Concerned’ Brits struggle with debts

Many Brits are struggling to keep their debts under control as over one in ten reveal they are “very concerned” about their financial situation.

This figure (11 per cent) has gone up from seven per cent in just three months, with around 2.7 million people saying they have sunk further into debt by over ten per cent, according to MoneyExpert.

Sean Gardner, chief executive of the company, commented: “With the festive season just around the corner, we can only predict that the number of people worried about their ability to deal with their debts is likely to increase.

“Christmas is a massively expensive time of year so you can’t help but worry that many more are likely to become increasingly concerned about how they’ll cope.”

However, he said, there are signs that people are beginning to get their borrowing levels down, with 27 per cent of Brits successfully cutting their debts over the past three months.

Mr Gardner added that consumers must, above all, work out a repayment plan and avoid burying their heads in the sand when confronted with debt.

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Britons underestimate debt levels

People might owe twice as much as they think they do, eyecatching new research from Mintel claims.

Using Bank of England figures, it found that Britons owe a total of £100 billion more than they are aware of, with each person on an average of £10,300.

However, their average estimate of debt was around half this figure at £5,251. The situation was likened by the market researcher to customers “burying their heads in the sand”.

Furthermore, a total of just one in five polled said that they worried about their debt level.

Finance analyst at Mintel Toby Clark said that Britons are “wildly under-estimating the amount of money they owe on credit cards and loans.

“Without a detailed understanding of exactly how much they owe and what rates they are paying, it is easy to see how the situation could spiral out of control”, he added.

Less surprisingly, Mintel also found that debt problems were far more acute in lower-income households, with unsecured loans being taken out to meet the costs of everyday living:

As an example of this, the report stated that around 11 per cent of those on low incomes used loans to pay for basic phone bills, compared to just 4 per cent of higher earners.

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