According to research conducted in October of this year with 2,322 respondents, the number of adults in the UK with over £10,000 of unsecured debt has increased by 0.4 million in six months, rising 1 per cent from 8 million (19 per cent) in April 2006 to 8.4 million (20 per cent) in October 2006. This means one in five people now have unsecured debts of over £10,000.
The survey also found an increase in the number of people struggling to meet repayments. The number of adults reporting regular problems repaying their debts has risen 9 per cent from almost 1.8 million (21 per cent) in April 2006 to 2.5 million (30 per cent) in October 2006.
Again, women in over £10,000 of debt were found to be the group experiencing the most financial difficulty, with 1 in 3 (33 per cent) now reporting regular problems repaying their debts; an increase of 7 per cent from just over one in five (26 per cent) in April 2006. Men fare a little better with just over a quarter (27 per cent) reporting regular problems repaying their debts; an increase of 8 per cent since April 2006.
As more people than ever struggle to meet their repayments, the number of people teetering on the brink of insolvency has also rocketed. 1.4 million adults (17 per cent) in over £10,000 of unsecured debt, report that they are ‘quite likely’, ‘likely’ or ‘certain’ to declare themselves bankrupt or take out an Individual Voluntary Arrangement (IVA). That’s an increase of 4 per cent from 1.1 million (13 per cent) in April 2006.
Here, the gender trend continues with 21 per cent of women in over £10,000 of unsecured debt now report some likelihood of becoming insolvent (an increase of 6 per cent in six months) compared with 15 per cent of men (an increase of 1 per cent since April 2006).
James Falla, director of Thomas Charles, commented: “This research pre-empts the DTI stats, which record personal insolvencies on a quarterly basis. Our latest research confirms that the debt problem in the UK is continuing to worsen.
"We are currently witnessing a correlation of increased borrowing alongside a massive decrease in the number of people coping with their debts. If action is not taken to curb borrowing trends in the UK, the situation is likely to spiral over the coming years, as illustrated by the 1.4 million adults currently reporting some danger of insolvency. In the female population, for example, where 1 in 3 women in £10,000+ of debt are struggling with repayments, we could quickly reach a tipping point where those in financial trouble outnumber those who are not.”
