George Osborne has announced that the coalition has led to a reduction in the countries deficit and that the economy is on the mend after being on the brink of bankruptcy, according to the BBC News website. The ONS (The Office for National Statistics) confirmed that there had been a 3.1% growth in the economy over the past 9 months in comparison to 2013, and that there was also a continuous growth in the jobs market, with the unemployment rate being at its lowest in 5 years.
Shaz Sulaman, Managing Director at Baines & Ernst commented on the latest economic figures by stating, “The economy is certainly moving in the right direction, but we know people are still struggling to keep up with debt repayments as the cost of living continues to rise”. These comments can be seen as a representation of the financial outlook that many people have within the UK at the moment.
Sulaman further commented, “We were interested to explore debt levels in the UK and revisit our previous Infographic to see whether statistics relating to debts had improved or declined over the past 12 months.”
Baines and Ernst has created a new Infographic titled ‘Personal Debt in the UK 2014’ which has been put together from using the statistics that ComRes released in their publications, ‘R3 – Personal Debt Snapshot – Wave 13’. This information resulted from interviews with 2,013 adults in the UK, with 51% of them admitting to having worries about debt. The year before, 21% less people worried and this has suggested that there are more reasons to fear personal debt in 2014.
Reliance on credit is considered one of the key factors behind these fears, with a 43% of the 51% who had worries over debt, said that credit cards caused them the most worry, which was up by 31% from the previous year. 22% were concerned about their overdraft repayments, which again was a substantial increase on the previous year, whilst 17% had worries over bank loan debts, which was up 89% from the previous year. The most shocking statistic is the 200%growth on worry over payday loan debts which is now at 9%.
The total of personal debt in the United Kingdom was at £160 billion by the end of April of this year, which is up £4 billion from the previous year, according to statistics released by Money Charity. This increase in personal debt is believed to be due to the rising living costs in the UK.
Shaz Sulman, speaking on the current worries over credit stated, “Turning to credit in order to make ends meet or write off existing debts could lead to further financial problems in the future.25% of those polled expected their financial situation will worsen in the next six months, if you cannot afford to repay your credit card or store cards in full every month and continue to spend, your situation can easily spiral out of control.”