Brits ‘underestimate debt burden’

The company reports that while the average amount of personal loan and credit card debt amounts to around £10,000 in the UK, the average consumer is convinced their debt management burden is only half this figure.

Furthermore, the latest study from Mintel found that better off Britons borrow to invest, while people with lower incomes tend to add to their debt management problems to fund living expenses.

“While Brits do seem to have a good grasp of their mortgage borrowing, they are wildly underestimating the amount of money they owe on credit cards and loans,” said Toby Clark, senior finance analyst at Mintel.

“Clearly, it is a lot easier to keep an eye on a single mortgage, than it is to juggle a couple of credit cards, a personal loan, a car loan and maybe even an overdraft as well.”

Howard Archer from Global Insight asserted recently that British credit consumers could face further financial pressures in months to come as a result of a further increase in the cost of borrowing.