In 2010 Britons did not consider themselves to be in serious financial difficulty until they reached £15,837 of debt, some £1,421 more than this year’s figure.
Bright Grey said this reflects an increased financial awareness in the UK. The provider also believes we are becoming increasingly conscious about the impact of rising unemployment. Two in five said losing their jobs and being unable to find another one is the biggest factor likely to affect their standard of living this year.
Also a rise in the rate of inflation was seen as having a far more dramatic impact on living standards than a rise in interest rates.
Roger Edwards, proposition director at Bright Grey, said: “Britons are sitting up and taking greater notice of the wider economic environment. People are more wary about getting themselves into serious levels of personal debt, yet over £14,000 is still clearly a cause for concern.
“As a result, Britons need to keep control of their finances and have contingency plans in place to be able to continue to pay for their essential monthly outgoings.”
Despite the rise in financial consciousness, Brits are still not protecting their own and their families’ futures, according to the provider.
The main reason cited for not having a protection product was the cost. Around 46% of people suggested that protection products were too expensive compared to 39% the past year.
One in five people said the products were unnecessary as they could rely on savings while one in ten said they would prefer to spend the money on other expenses.
Roger Edwards continued: “With the cost of the weekly shop increasing dramatically alongside costs at the petrol pumps, energy bills and seemingly everything else, it’s no wonder there’s a perception that protection insurance is too expensive.
“However what we’ve discovered is that most people grossly overestimate its true cost and are quite taken aback when they find out that as an example, 40 year olds can buy over £125,000 of life cover for £10 a month.
“People are becoming increasingly aware of the impact of high debt yet are still failing take out adequate protection. Britons need to make financial provisions for their future and not live under the hope that state benefits or bail outs from family and friends will allow them to maintain their standard of living.
“Protection products are cheaper than ever and it is crucial that people recognise the significance of putting an appropriate financial safety net in place.”
