Callcredit Check reveal spending on unsecured debt soars
Number of individuals spending over 50pc of their monthly income on unsecured debt repayments rises to almost one in ten.
Key statistics
• The proportion of UK adults spending over
50pc of their income on unsecured debt payments
has risen to 8pc compared to 6pc reported in
August 2008 and 2pc in August 2007
• The number of 25-34 year olds spending more than
50pc of their income on unsecured debt repayments
has doubled since August 2008. Today more than one in 10
(12pc) spends this amount compared to 6pc in
August 2008
• Women are spending a larger proportion of their income on
servicing their debt than men. This peaks among women aged 24-35,
with 14pc spending over half their income on
unsecured debt repayment
• Over two thirds of adults are more concerned
about their financial situation now than they were 12 months ago,
with the over 55s the most concerned
• Almost half (45pc) of UK adults think their
financial situation will worsen over the next 12 months compared to
just 19pc who think it will improve
• The 25-34s are the most optimistic age group with
31pc thinking things will improve
• The over 55s are the most pessimistic age group with just
9pc thinking things will improve, compared to
57pc who believe things will get more
difficult
• Women are more pessimistic than men about the future across all
age groups, peaking among women over 55 years of age
(59pc think their financial situation will have
worsened by this time next year)
The proportion of people spending over 50pc of their monthly
income on unsecured debt re-payments has risen over the past six
months to 8pc, according to independent research commissioned by
online credit report provider Callcredit. The same
research also shows the 25-34 year old age group to be struggling
the most, with more than one in ten (12pc) spending this amount on
servicing debt levels - double the numbers reported in August 2008.
Women appear to be hardest hit by repayment levels with 14pc of
women aged 25-34 spending over half their income on unsecured debt
repayment. Guidelines from the Department for Business, Enterprise
and Regulatory Reform, BERR, identify the threshold for becoming
over-indebted as an individual spending over 25pc of their gross
monthly income on unsecured repayments.
Consumers appear worried about their financial future with two thirds (69pc) saying they are more concerned now than they were twelve months ago. Almost half (45pc) believe that their financial situation will deteriorate over the next year, compared to 19pc who think it will improve. The over 55s appear the most pessimistic group with just 9pc believing the situation will improve, compared to the 57pc who believe their circumstances will worsen.
Owen Roberts, head of www.callcreditcheck.com, comments "The worsening economic climate is having a clear effect on consumer attitudes and behavior. The increasing proportional spend on unsecured debt paints a concerning picture of consumer finances within the UK and this level of debt servicing would appear to be unsustainable.
"Our advice to any individual who is struggling with debt repayments is to speak with their lenders before things become unmanageable or contact an independent organisation such as the Consumer Credit Counselling Service to work out the best way forward."
Research information
All figures, unless otherwise stated, are from YouGov Plc. Total
sample size was 1962 adults. Fieldwork was undertaken between 23rd
- 29th December 2008. The survey was carried out online. The
figures have been weighted and are representative of all GB adults
(aged 18+).
About Callcredit Check
• Callcredit Check is the consumer arm of credit reference
agency Callcredit, providing consumers with instant online access
to their credit report and services to help them monitor their
credit status.
www.callcreditcheck.com
• Callcredit is the UK's most innovative and customer-focused
Credit Reference Agency, with an established reputation for service
differentiation; focusing on listening to clients and creating
innovative solutions that deliver real business value. Find out
more at www.callcredit.co.uk
• Callcredit is one of six core businesses that form the
Callcredit Information Group (CIG). CIG brings together experts
across the fields of credit referencing, marketing services,
interactive solutions and consultative analytics to enable our
client base of businesses and consumers to make informed decisions
using our innovative products and services.
www.callcreditgroup.com
The group is made up of two complementary divisions:
- Credit Solutions, encompassing Callcredit,
Legatio and DecisionMetrics - specialists in credit
risk,
ID verification services and tracing tools.
- Marketing Solutions, providing specialist
knowledge in customer analytics, consumer targeting, database
building and hosting, marketing communications, business modelling
and market analysis through three market leaders in their own
fields: EuroDirect, Broadsystem and GMAP Consulting.