Despite the financial crisis and the end of so-called ‘easy credit’, personal debt in the UK continues to grow. Correspondingly, so does the number of people seeking debt help. Research carried out by the Consumer Credit Counselling Service last year showed that CCCS clients had on average debts of £19,338 on credit cards, personal loans and other unsecured credit (excluding mortgages). They also identified how levels of personal debt vary across the country, revealing that Shetland had the lowest average debt in the UK, while Slough had the highest. The South East was generally seen to have the highest average debt in the UK.

There are some more sobering statistics out there too. A staggering £179 million in personal interest is paid in the UK every day. There were 1,577 Consumer County Court Judgements issued every day during the first quarter of 2011, with the average judgement amount standing at £3,118.

Unwillingness to compromise

Against this backdrop of evidence it is no surprise that more and more people are seeking debt advice. It is clear that habitual overspending is a large contributing factor to these increasing personal debt levels in the UK. Insurance company Bright Gray has revealed that one in five single adults use credit cards and loans to live beyond their means. Out of 2000 people they questioned in June 2010, 17% confessed to spending more than they earned each month. A quarter of these people admitted that this was due to an unwillingness to compromise their lifestyle, regardless of whether or not they could afford it.

In addition, one in six people said they often used the agreed overdraft in their current accounts to cover ‘lifestyle costs’. A staggering 35% of people overall said they ‘felt they had to spend’ and 24% wanted to spend simply in order to enjoy themselves. The researchers for Bright Grey calculated that the average income for single people is £1,267 per month after tax. But those people questioned said they in fact needed £1,594 (26% more than their current income) to live the lives they wanted. Another survey by Scottish Widows found that 35% of UK adults (equivalent to 17 million people nationwide) admit to neglecting their finances. Of these people, 25% said they simply tried not to think about money in their day-to-day lives.

Rising prices

Rising food and energy prices are also contributing to the shortfall between spending and earnings, which is fuelling the increase in personal debt. Energy prices in the UK have risen at nearly twice the rate of those in Europe, increases of 30% against 15% in the rest of Europe.

The Citizens Advice Bureau deals with 9,500 new cases of people needing debt help every working day in England and Wales. People are also turning to debt advisors for help as they realise that it’s simply not viable to try and ‘borrow their way out of debt’.

Advice on debt management is out there but the evidence suggests many people are refusing to address the issue. But adopting a ‘head in the sand’ mentality towards personal debt will not help the problem. The only way to tackle this very modern problem is to seek clear, no nonsense debt advice and to make the changes necessary to live within your means. Only then can you begin to bring a situation that can very easily spiral into an abyss of debt worries back under control.

For further debt help and debt solutions such as Individual Voluntary Arrangement (IVA) please visit DebtAdviceGroup.co.uk today