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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