Household bills, expensive mortgage and rental payments emerge as the top reasons UK adults are in debt
According to a newly-published report almost half of adults are currently in debt and owe an average of £6,465.
But, while credit cards and general overspending are responsible for this debt in some cases, it would seem the spiralling costs of paying for basic living is the most common reason adults are getting into financial difficulty.
According The UK Spending Report, commissioned by personal insolvency practice, Creditfix.co.uk, the top cause of debt in the UK was in increase in household bills, with 36% of respondents attributing their money problems to this.
But 33% said raised rent or mortgage repayments were the main culprit, a trend being driven by increasing property prices and lack of supply of new homes.
Head of marketing at Creditfix, Taylor Flynn said that the property market is booming at the moment and the costs associated with being a homeowner are continuing to rise, so it’s unsurprising that many people are struggling to keep on top of these costs.
According to the study, credit card interest was the third major cause of debt, with 21% of respondents admitting this had plunged them into difficulty.
Creditfix said the average British adult owned three credit cards with a total credit limit of approximately £10,000 available to them across these.
Flynn said, with so much credit on hand, it’s easy to understand how temptation can get the better of people sometimes – but treating ourselves on credit can be a slippery slope.
However, he said that while it was understandable spiralling housing costs and bills would put pressure on adults’ finances, when it came to credit repayment, excessive spending on clothes and accessories and general overspending, it was a ‘different ballgame’.
According to the survey, using credit to buy clothes and general overspending were the cause of debt for 19% and 16% of respondents respectively.
Flynn said that they classify these as non-essential expenses and so it seems that there is some work to do to educate Brits. Everyone deserves a treat from time to time, but there are ways that people can treat themselves whilst still being savvy with their finances.