Research from the Council of Mortgage Lenders (CML) found that despite this households with low levels of savings are more likely to have debts that consume a high proportion of their income, and may get into difficulty if they suffered a loss of earnings.
But, over the next two years, households are apparently aiming to reduce, rather than increase, their level of debt. And, the number of mortgage arrears and possessions continues to fall.
Michael Coogan, director general of the CML, said: "It is reassuring that the survey found that most households are coping with debt. This is borne out by the decline in mortgage arrears, but neither lenders nor borrowers can afford to be complacent about the future.
"Against the current economic backdrop, it would be worrying if there were large-scale problems in coping with debt. The fact that some households are struggling, or appear vulnerable to adverse events like an unexpected loss of income, should encourage caution. Borrowers should continue to assess their financial commitments and, in particular, how they would cope with mortgage payments if they unexpectedly lost their income. For many, insurance to cover their mortgage payments would provide greater security."
