UK consumers ‘in control of debt repayments’

People across the UK are gaining confidence in the state of their personal finances, with debt management issues causing fewer problems than in the recent past.

This is according to the latest Lloyds Bank Lending Report, which indicated that 83 per cent of the 6,210 people surveyed felt confident or very confident that they will meet their future debt repayments.

Moreover, 84 per cent said they are able to keep up with their current repayments, up from 81 per cent during the first quarter of the year. It was also shown that only 11 per cent had missed at least one payment in the last 12 months, down from 13 per cent in Q1 2015.

Currently, the main reason people have for taking out a loan is to consolidate their debts in one place, with 31 per cent of those polled citing this as the purpose of their recent personal loan. Purchasing a car or bike was the second most popular reason.

Consideration towards using a personal loan has risen over the past three months by 58 per cent as has the consideration of credit cards which offer rewards or low interest rates. People are also giving more thought to taking out an overdraft or arranging a peer-to-peer loan.

Additionally, the report indicated that most people applying for a loan tend to do so online or via a mobile device, with in-branch applications being the second most popular method.

Sam Clark, head of loans at Lloyds Bank, said: "We are starting to see encouraging signs as more people can better manage their loan repayments. In addition, there has been an increasing shift in those saying that they will not need to take out more debt in the future.

"Overall, the results paint a positive picture and the upward move in consumer confidence will help a lot more people feel more in control of their finances."