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Number of people in debt in the UK

National statistics show that residents of the UK are in over £18.1 billion worth of debt to the government and utility providers. As debt becomes more unavoidable is this affecting how people are living their lives?

Is it possible to live normally under the pressure of financial burdens - and are people reaching out to support services to try and manage their debt?

Number of people in debt in the UK

(per 10,000 people)

Personal debt over time

As many as 83 per cent of UK adults who are currently in some form of debt have been so for over a year, this suggests debt is a longer term consideration. The point is further emphasised by the finding that 5 per cent have been in debt for over 26 years.

This analysis doesn’t include student debts, which can last a long time - those with student debt actually had one of the lowest average lengths of time spent in debt in the study, only 6.5 years on average. This suggests student debt could be considered ‘good debt’ as it ultimately facilitates stronger financial prospects in the long term.

Over 57 per cent of people believe it will take 3 or more years to pay their debt off – while over 1 in 10 (12 per cent) of those studied who are currently in debt did not think they would ever be able to pay it off. This attitude was highest among those in student debt, where 1 in 5 felt they would never pay off their debts fully. Those with payday loans or households arrears were also pessimistic at their ability to pay off their debts, with 14 per cent of these debtors holding the opinion they'd never be able to fully repay their debt.

Personal debt over time

Average debt levels in the UK

There remains plenty of aversion to financial products that could lead to debt, even in emergency situations 91 per cent of those studied wouldn't use a high interest payday loan to cover their financial deficit, 86 per cent wouldn't use their overdraft.

Instead, credit cards are the primary solution for the majority, with 42 per cent being prepared to use them to balance their finances.

Average debt levels in the UK]

Financial anxieties associated with debt

Over half (55 per cent) of UK residents with household arrears worry about their debt daily – this is marginally higher than those who worried about debts they owe to friends and family on a daily basis (52 per cent).

Despite the majority worrying about their finances daily 42 per cent of those with debts to friends and family have never sought any advice for managing their debts. Those with payday loans were the most likely to seek financial advice and support – 44 per cent sought help from an advice service, 37 per cent spoke to friends or family, and 33 per cent consulted a bank.

Those with problem debt are 7.76 per cent more likely to suffer from anxiety or depression, this translates to roughly 81,000 people in the UK.

Student debt was found to instill the least financial anxiety amongst adults, with 23 per cent saying they never worry about it.

Financial anxieties associated with debt

The impact of debt on daily life

Beyond the financial anxiety high levels of unmanageable debt can cause, the personal debt individuals carry can impact decision making in their daily life as well as impacting longer term commitments.

One third (34 per cent) of those asked have been unable to purchase everyday items or socialise as much as they would like as a result of financial worries.

The study found 38 per cent of those who identified as ‘in debt’ have been unable to take holidays as a result of their financial situation. In terms of how finances have impacted more long term commitments the study found 7 per cent of those in debt have been unable to have children solely as a result of their financial situation – similarly 7 per cent have also been unable to get married for the same reason.

The impact of debt on daily life

Dealing with debt

Unmanageable debt can lead to additional stress, anxiety and even mental health issues and when management of this debt is no longer in the hands of the individual the outcomes can be upsetting.

For some, the stress of debt can start to take over their lives. This is most common for those with household arrears, 55 per cent of whom said they worry about their debts daily. Those with payday Loans or personal debts to family and friends are almost equally concerned, 52% of whom worry daily about their finances.

Dealing with debt

For more information about the options available when dealing with debt visit our debt guides hub.

If your debt problems run deeper than this, you should contact a debt charity such as StepChange, (0800 138 1111) or National Debtline (0808 808 4000) which is run by the Money Advice Trust.

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Sources & Methodology

Consumer attitudes were determined by a survey of 1000 UK adults in debt, conducted 16/08/2018-28/08/2018 in association with OnePoll.

  • https://www.stepchange.org/
  • Tackling Problem Debt - National Audit Office - September 2018
  • Organisation for Economic Cooperation and Development, OECD/INFE International Survey of Adult Financial Literacy Competencies, October 2016

 

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