£14,416 worth of debt

Briton sees over £14,000 worth of debt as trouble.

By Fusion Lifestyle Reporter
April 20, 2012, 10:12 am
£14,416 worth of debt

Britons only see themselves in serious financial difficulty once they are in £14,416 worth of debt according to Bright Grey’s latest financial safety net report.

While the figure still represents a vast amount, underlining how the attitude to personal debts has spiralled out of control, this level represents an increased consciousness from Britons when it comes to viewing their finances.

In 2010, we did not consider ourselves in serious financial difficulty until we reached £15,837 of debt, some £1,421 more than this year’s figure.

Britons are also becoming increasingly conscious about the impact of rising unemployment. Two in five (40%) cited losing their jobs and being unable to find another one as the biggest thing likely to affect their standard of living this year.

A rise in the rate of inflation (32%) was seen as having a far more dramatic impact on living standards than a rise in interest rates (15%).

The main factors to affect living standards in 2012

Losing your job and being unable to find another one (40%)

- Getting a serious illness (39%)

- A rise in the rate of inflation (32%)

- Partner getting a serious illness (27%)

- Partner losing their job (25%)

- None of these (19%)

- National interest rate increase (15%)

Roger Edwards, proposition director at Bright Grey: “Over the past 12 months, Britons are sitting up and taking greater notice of the wider economic environment. People are more wary about getting themselves into serious levels of personal debt, yet over £14,000 is still clearly a cause for concern. 

“As a result, Britons need to keep control of their finances and have contingency plans in place to be able to continue to pay for their essential monthly outgoings.”

Despite a rise in financial consciousness, Britons are still not protecting their own and their families’ futures. People are beginning to recognise the effect that losing their job would have on their standard of living, but they need to consider how they would cope if their income stopped for other reasons.

The main reason cited for not having a protection product was the cost; 46% of people suggested that protection products were too expensive compared to 39% last year. One in five people (19%) said the products were unnecessary as they could rely on savings, while over one in ten (11%) said they would prefer to spend the money on other things.

Roger Edwards, “With the cost of the weekly shop increasing dramatically alongside costs at the petrol pumps, energy bills and seemingly everything else, it’s no wonder there’s a perception that protection insurance is too expensive.

“However what we’ve discovered is that most people grossly overestimate its true cost and are quite taken aback when they find out that as an example, 40 year olds can buy over £125,000 of life cover for £10 a month.

“People are becoming increasingly aware of the impact of high debt yet are still failing take out adequate protection.

2Britons need to make financial provisions for their future and not live under the hope that state benefits or bail outs from family and friends will allow them to maintain their standard of living. 

“Protection products are cheaper than ever and it is crucial that people recognise the significance of putting an appropriate financial safety net in place.”

Tags: your, money, debt, 14.416,

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