One in four people who take out loans other than mortgages or student debt reckon they will take at least three years to pay off their borrowings. Seven per cent do not believe they will ever be debt-free.
Those are the key findings of a new study by uSwitch, the price comparison site. The study also revealed that, excluding mortgages and student loans, UK adults have debts averaging £2,423, rising to £3,385 for those aged 25 to 34. Men borrow more than women – £769 more last year – and high earners borrow more than those in lower wage brackets. Those earning £40,000 to £70,000 owed an average of £3,000 each.
People living in Yorkshire and Humberside borrowed most, with an average figure of £2,902, followed by the Welsh, on £2,688 and those in the north-west, with £2,665.The most frugal were those in the East Midlands, whose loan debt averaged just £1,988, closely followed by those in East Anglia, on £1,991.
One in three borrowers have turned to their family for help with paying their bills, but they will not seek professional help until their debt passes £5,200. Worryingly, says uSwitch, 7 per cent of borrowers have gone further into the red in an attempt to clear priority debts.
When making economies to pay bills, one in five borrowers reports cutting back on essentials such as food and petrol, while four in ten are sacrificing luxuries such as holidays.
Michael Ossei, personal finance expert at uSwitch.com, says: “People are running out of ways to fund their ever-increasing household bills, and with salaries failing to deliver, many are being forced to turn to debt just to stay afloat. But it’s easy to borrow just a bit too much and then find yourself in over your head.”