Families in the UK are facing hard times as their debts are predicted to increase in the future, but there is an increasingly popular debt solution available that could avoid a debt crisis from hitting UK households.
As things start to get back to normality after the Covid-19, the financial burdens that UK households are facing are far from ordinary. Current data shows that the average total debt per household in July 2021 was £62,670 compared to July 2020 when the figure was £60,403. That’s almost a 4% increase!
What is more worrying is the predictions made for the future. It is estimated that in 2025 the average household debt will be a staggering £82,641 if people continue in the same pattern of credit behaviour.
So why are we borrowing more?
- Pandemic – We have the pandemic to blame for this. During the height of the pandemic (remember Christmas bubbles, food shortages and supermarket queues?), approximately nine million people had to borrow money to pay for their income is reduced, coupled with the additional expenses that come with the festive season.
- Low Income – The worst affected have been the lower-income households who have borne the brunt of the pandemic with little or no option to work from home, no or low sick pay and reduced living standards.
- Borrowing culture – Compared to our grandparents and parents, we have a greater dependence on credit, ranging from credit cards, overdrafts, and personal short-term loans. Records show that the average debt per adult in 2020 was £31,845, a stark comparison from over 20 years ago, where the average debt was only £4,835.
Can we curb the trend?
Debt causes not only financial but emotional stress, so it is important to kick the trend before you face the threat of bankruptcy. Between June and August 2021, an average of 305 people per day in the UK declared themselves bankrupt. Those statistics might sound depressing, but people are trying to break free from the shackles of personal debt.
With the help of government legislation which was introduced back in the 80s, UK residents who have £5000 or more in unsecured debt could have a large chunk of their debt completely written off.
The solution has already helped thousands of people in debt, and it could help others who are facing similar financial challenges. It is important to check if you meet the criteria of this invaluable service.
Select any of the qualifying criteria below to find out in principle if you could be eligible to write off a proportion of your debt: