Jun
21
I Am in Debt, Therefore, I Am
Filed Under News
Being in debt is the natural order of things, according to a new survey by Marks & Spencer Financial Services. 81% of adults believe borrowing to be an acceptable part of life and 58% view being in debt as the normal state of affairs. Just 16% said debt should be avoided except in “special circumstances only”.
Commenting on the research Stephen Rose, Debt Advice Bureau director said, “Not that confirmation is needed but this research shows how totally de-stigmatised debt has become”.
18 million Britons have unsecured loans, according to M&S. Whilst the average balance owed is £4,350 the actual debt levels were proportional to income. People earning £40,000 or more owed an average of £8,080 each compared to an average debt of £2,650 for those earning under £15,000.
The most common purpose for an unsecured loan, with 49% of the total, was to purchase a car. That was well ahead of home improvements, which was responsible for 20% of loans. Disturbingly, 8% of loans were reportedly taken out to pay for ‘everyday expenses’.
“One-in-twelve loans to pay for the normal everyday expenses is an alarming statistic which could indicate deeper financial problems for those borrowers”, said Rose. “For now they may be able to manage. When, eventually, rates get too high or credit criteria tighten, then those people borrowing to meet the bills could find themselves with major problems”.
The research also showed up a slight gender difference when it came to credit card debt. 38% of women admitted owing £500 or less on their cards against just 25% of men. Whilst 48% of men had a four-figure debt on their cards compared to 35% of women.
