Debt freedom day declared

Those wishing to become debt free may be keener still if they realise the average Briton has to work six weeks just to earn the money it takes to pay the interest on their debt.

Such a figure has been calculated by consumer website unbiased.co.uk, which has declared February 15th Debt Freedom Day.

And this date only refers to the repayment of interest, with the six weeks of earnings doing nothing to pay off the actual capital of the debt, which totals £120 billion in loans and £58 billion in credit card debt.

The path to reducing this debt, let alone limiting it, is not a straightforward one of course, unless one suddenly gets a major cash windfall, but there are ways people could potentially reduce their interest payments.

For example, getting a consolidation loan charging less interest than cards or existing loans is one way this can be achieved.

And taking action is a wise move, according to chief executive of unbiased.co.uk Karen Barrett, who said: “With debt levels still remaining at extreme highs there is no better time for people to service their debt and get back in control of their finances.”

Those in major trouble may find individual voluntary arrangements or a debt management plan a good way to tackle the situation.

One of the ways in which credit card debt may have piled up is through surcharges imposed by retailers when people have bought goods and services.

Consumer group Which? issued a super complaint to the Office of Fair Trading over this issue last week, arguing charges should reflect the cost of processing payments rather than being used for profiteering.

By James Francis