The level of personal debt considered "normal" has risen, it has been claimed after a new survey was published.
The level of personal debt considered “normal” has risen, it has been claimed after a new survey was published.
Scottish Provident found the average amount a person must owe before they regard themselves as being in serious debt is £15,837.
This is higher still for the 18 to 34-year-old range, at £16,646, while for over-55s it is down to £14,424.
However, it may be noted that a debt of £15,000 is the level at which people can consider an individual voluntary arrangement (IVA) if they are struggling to make repayments, so it may be regarded as alarming that amounts up to this level can be thought of as acceptable.
This was certainly the view of head of marketing at Scottish Provident Susan Barclay, who suggested people have come to the wrong conclusions about their own levels of borrowing after hearing and reading so much about the national debt.
She remarked: “To not believe they would be in serious financial difficulty before they reached debt levels of over £15,837 is a worry and it underlines how debt has become too readily accepted in the UK. What starts out as a small level of personal debt can quickly spiral out of control.”
Taking out an IVA could be one way for those who realise £15,000 is too much to get back in control of their finances.
Figures from the Insolvency Service produced last month revealed the level of personal bankruptcies and IVAs fell in 2010 after reaching a 20-year peak the previous year.
However, it also showed the proportion of women getting into serious trouble has been growing, making up 40 per cent of the bankruptcy tally in 2009, compared with 29 per cent in 2000.
By James Francis