Debt worries affecting health of 3 in 4 UK adults

Some 74 per cent of people in the UK with debt worries think it is damaging their mental health.

Research by Citizens Advice has highlighted the scale of the problem facing individuals who are struggling to make ends meet. Some 51 per cent said their work performance was suffering, while 56 per cent have also seen their personal relationships falter because of their money problems.

Nearly eight in ten (79 per cent) are experiencing sleepless nights as a result of their circumstances, while 51 per cent have suffered an anxiety attack. At the end of September 2012, outstanding personal debt – including mortgages – stood at £1.415 trillion.

Some 1,700 people were interviewed as part of the study and most owed between £1,000 and £20,000, but one in ten had arrears of over £30,000. For those who are in excess of £15,000 of debt, an Individual Voluntary Arrangement (IVA) may be the best course of action.

The legally-binding agreement will typically last for five years and freeze interest and charges on all unsecured debts, while all of the debt not repaid within the IVA is written off. It helps consumers to avoid bankruptcy and prevents unwanted contact from creditors, although people need to make sure they are prepared to be dedicated.

Recent figures from the Insolvency Service have found there were 28,062 individual insolvencies in England and Wales in the third quarter of 2012 as people seek to bring their financial situation under control.

Citizens Advice chief executive Gillian Guy said: "We are seeing a debt epidemic in the UK which is affecting people from all walks of life. Debt can play havoc with family relationships, work and mental health which is why we are urging people struggling with money worries to [seek] advice."

She added people should not hesitate to talk to experts in order to bring their situation under control, as failing to do so could see their debts "spiral out of control".

By James Francis