Brits ‘comfortably’ in debt

In total 75 per cent of CreditIndex’s Personal Credit Index respondents said their borrowing did not present them with difficulties, with only 11 per cent predicting that their levels of debt would rise in the next few months.

Furthermore, 85 per cent said they were confident that they were able to pay household bills, although this figure was significantly lower in London and regions of the south and south-east.

“The Personal Credit Index will provide a valuable benchmark of consumers’ attitudes towards borrowing and their perceptions of their credit situation and will track changes in Britain’s ever-changing credit climate,” said Jim Hodgkins, managing director of CreditExpert.

“It’s important that we keep track of our credit commitments to ensure we’re borrowing within our means and are aware of any changes to our credit report that could impact our future borrowing power.”

CreditExpert’s positive conclusions are at odds with many personal finance experts concerned by the UK’s debt-heavy culture – which now owes, in total, £1.1 trillion.

Commenting, Andrew Smith of IVA specialists, ClearDebt, said:

“The experience of many of the people who come to us for help mirrors that of the CreditIndex Survey – but shows it may be a little naïve. Many of those who enter an IVA with us were deeply, but comfortably, in debt – secure in the knowledge that they had carefully calculated what they could afford to repay.

“Then, life did something unexpected – like divorce, or partnership breakup; pregnancy – meaning one of a family’s two incomes was lost; illness; job loss; even unexpected but unavoidable household debt. These and other unexpected and expensive life changes can turn manageable debt into a financial crisis,” he concluded.